Extension to the Coronavirus Job Retention Scheme – a short overview and a few points to consider

The Government has announced a further extension to the Coronavirus Job Retention Scheme (CJRS). 

The Coronavirus Job Support Scheme (CJRS) will now remain open until 30 September 2021.

The scheme will remain as it is until July when employers will contribute 10% and 20% in August and September – to reflect businesses being able to operate more normally from the end of June.

Details of the extended scheme:

• The scheme will provide a grant towards the cost of wages of 80%, capped at £2,500 per employee, per month – with contributions from employers of 10% in July and 20% in August and September
• Employers will have to cover the costs of employer national insurance and pension contributions
• Employers will also be allowed to top up employees wages, but there is no requirement for employers to contribute to the furlough wages
• There is no requirement for the employee to have been included in a previous CJRS claim
• There is no requirement for an employer to have previously submitted a CJRS claim
• For periods ending on or before 30 April 2021, your employer can claim for you if you were employed on or before 30 October 2020, as long as they have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020. This may differ if you were made redundant, or you stopped working for them on or after 23 September 2020 and they then re-employed you
• For periods on or after 1 May 2021, your employer can claim for you if you were employed on 2 March 2021, as long as they have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021
• Employees can be fully or flexi-furloughed under the extended scheme

If employers are thinking of using the scheme for the first time, or for employees not previously furloughed, they will need to ensure that a new furloughing agreement is in place with the employee. Employers who have previously used the scheme also need to consider whether the agreements used previously remain valid. For instance, was the agreement time limited or open ended? If the agreement was time limited, employers will need to update their agreements. Similarly, many employees have returned to working their usual hours since their period of furlough, with their employers writing to tell them they are no longer subject to the furlough agreement. In these circumstances, employers are likely to be required to put in place a new furlough agreement.

In a significant departure from the previous CJRS scheme, employees will only need a 7 day qualifying period, down from 21 days under the old version of the scheme.

We are yet to have full guidance and details on the extended scheme, but we will be providing updates to this blog when we have more guidance. In the meantime, should you have any queries, please contact Steve Ashworth or myself.