Flexible furlough from 1 July under revised CJRS

Updated on 1 June 2020

Changes to the Coronavirus Job Retention Scheme (CJRS) will apply a month earlier than expected. From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. However, staff must have been furloughed by 10 June to be eligible.

The Chancellor has announced the government’s plans to change the CJRS which will now be re-engineered to support businesses sending staff back to work. Employers will be able to put staff on part-time furlough, claiming the CJRS grant for a portion of their salary.

Critically, employers will only be able to claim going forward if they have previously claimed under the pre-1 July scheme.

The proposed changes also introduce a new limit to the number of staff who can be included on a claim. This will be based on the maximum staff ever included in any single pre 1 July claim. The Chancellor also confirmed that from 1 August the CJRS grant will no longer cover the cost of employers’ National Insurance nor pension contributions with employers expected to cover the costs.

Summary of the CJRS scheme changes:

 

July

August

September

October

Government contribution:

Employer NIC and Pension contribution

Yes

No

No

No

Government contribution:

Wages

80% up to

£2,500

80% up to

£2,500

70% up to £2,187.50

60% up to

£1,875

Further points to note:

  • A new minimum reporting period of one week will apply from 1 August 2020. More frequent claims will not be accepted, but the reporting period can be longer.
  • From 1 July, claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward. This is necessary to reflect the forthcoming changes to the scheme.
  • The grant will be based on the same premise as now, so the employee must be paid the lesser of 80% of reference salary and £2,500 per month. The government contribution to the 80% of reference salary is being reduced as the scheme progresses.
  • From 1 August onwards, the scheme will no longer cover the cost of employers’ National Insurance nor pension contributions applicable to the grant.
  • The new calculation will apply from 1 July to factor in the cost of hours worked to hours furloughed ratio.
  • Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period. Further details will be included in future guidance.
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts
  • There will be a new maximum limit to the number of staff who can be included on a claim. This will be based on the maximum staff ever included in a single claim under CJRS.
  • CJRS will end on 31 October 2020.

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