Coronavirus Job Retention Scheme: what are the updates?
On Wednesday, 3 March 2021, Chancellor Rishi Sunak unveiled his Spring Budget statement for 2021 during which he announced plans to extend the Coronavirus Job Retention Scheme (CJRS).
The CJRS has protected millions of jobs since its introduction in March of last year and had been due to come to an end on 30 April 2021 however, the Chancellor vowed to help millions more through the challenging months ahead and announced that the CJRS would be extended until 30 September 2021.
The Chancellor’s announcement and Spring Budget 2021 can be found here. In summary, it provides as follows:
Until 30 June 2021, employers can continue to claim 80% of employees’ wages, up to a maximum of £2,500.00 per month (or £576.92 a week) for any hours not worked. Thereafter, from 1 July 2021, the level of the grant available to employers under the CJRS will be slowly tapered to reflect the fact that people will be returning to work, albeit the amount a furloughed employee receives should not fall below 80% of wages. This means employers will have to start contributing to employee wage costs under the scheme in the following way:
- Until 30 June 2021, employers will only have to pay pension contributions and NICs.
- In July 2021, employers must pay 10% of wages.
- In August and September 2021, employers must pay 20% of wages.
What does this mean in practice?
This means that from 1 July 2021, the Government will only reimburse 70% of salary (up to a maximum of £2,187.50), meaning employers will be required to cover the top-up to 80% (or more, depending on what the employer agreed with the employee).
Finally, during August and September 2021, the Government will only reimburse 60% of salary (up to a maximum of £1,875.00), meaning employers will be required to cover the top up to 80% (or more, depending on what the employer agreed with the employee).
Further information in connection with changes to the wage grants can be found here.
All other eligibility criteria in connection with the CJRS remain unchanged.
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