CJRS – Upcoming changes to payments and the furlough scheme

28/06/2021

With Coronavirus restrictions easing and many businesses starting to get back on their feet, many are no longer relying on the support of The Coronavirus Job Retention Scheme (CJRS).

For those that do still need it, support is still available to cover the costs of staff on furlough. However, this will be being withdrawn slowly over the course of the next three months before closing altogether at the end of September.

The withdrawal of this scheme could have a substantial financial impact on businesses still reliant on it – so they must be prepared for the changes ahead.

As with the existing scheme, furloughed employees will continue to receive 80 per cent of their usual wages capped at £2,500 a month, or equivalent weekly or daily figures, for usual hours not worked right up until the scheme ends later this year.

However, from 1 July, employers must make a 10 per cent contribution to these costs, as the Government grant will only cover 70 per cent of the costs (capped at £2,187.50).

In August and September, the Government grant will then drop again to 60 per cent (capped at £1,875), meaning that employers must make a 20 per cent contribution to the amount paid to employees.

The calculation of usual wages is still based on the original qualifying criteria before the employee became eligible for furlough.

Those dates vary, depending on whether the employee was reported to HMRC on or before 19 March 2020, 30 October 2020 or 2 March 2021.

Any pay rises since an employee’s reference date are not taken into account for any time they are furloughed.

If you need help or advice on employment related matters please contact Susan Eldon or you’re your usual WMT contact.