Furlough scheme extended to 30 April 2021
It is very good news and a sigh of relief for businesses and employers this week, The Chancellor, Rishi Sunak, has announced that the Coronavirus Job Retention Scheme (CJRS) will continue until the end of April 2021 for the UK, extending it by one month.
The scheme, which was introduced this year in March 2020, aimed to reduce mass redundancies from happening across the country during the first Lockdown. The Chancellor had originally extended the CJRS only to the end of the second Lockdown period, 2nd December 2020, and then to 31 March 2021, but has today announced a further extension to the end of April next year.
10 million people and their employers were able to take advantage of the CJRS in the months up to 31 October - the date when the CJRS should have stopped and the new Job Support Scheme would have taken over, but the double extension is very welcome news indeed. The CJRS is already known and trusted by employers and they have experience of how to make a claim.
Sunak Rishi, said the scheme will pay up to 80% of a person's wage up to £2,500 a month. He told the Commons that the government will review the policy in January 2021.
The Chancellor said his intention was "To give businesses security through the winter", adding "The security we are providing will protect millions of jobs."
What about the Self-Employed?
Changes have also been made to The Coronavirus Self Employed Income Support Scheme (SEISS) - designed to protect people in a similar way to employed workers. Mr Sunak went on to say that the next Self-Employed Income Support Grant, for November to January, will now increase to 80% of average profits, up to £7,500 - paid in a single instalment. Applications will be open from 30 November for those who are eligible and have been affected by coronavirus.
To be eligible, more than half of a claimant's income needs to come from self-employment. The schemes have been open to those with a trading profit of less than £50,000 in 2018-19, or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
The government's original plan was for the third grant to only cover 40% of average monthly trading profits, with a limit of £3,750 in total. This was then updated to cover 55% of trading profits, but just a few days later was extended again to 80%. A fourth grant will cover the three-month period from the start of February 2021 until the end of April, with terms still to be confirmed.
£1,000 Job Retention Bonus is scrapped!
The Job Retention Bonus scheme was scrapped at the end of October 2020. It had originally been announced as part of the new Job Support Scheme in October (which is now on hold) where employers were to be offered a £1,000 bonus for re-engaging each worker taken back into work from Flexible Furlough leave - the Coronavirus Job Retention Scheme (CJRS). The payment had applied for every worker re-engaged back from furlough who continued in work until January 2021.
Sunak - It is scrapped for now and will be replaced with a new “Retention Incentive” to be deployed at an “appropriate time”. See Personnel Today's article...
Vaishali Thakerar, Head of Employment, Lawson-West Solicitors, Leicester comments:
"The positive view is that this takes the pressure off employers who are very concerned about the future viability of their businesses during the second Lockdown and into the winter months and who fear being forced to make staff redundant, possibly having to make many redundancies just before Christmas. What a relief this news is and thousands of business owners and millions of employees will benefit.
The negative view is that perhaps the government sees the pandemic lasting far longer than first anticipated and by extending the scheme to the end of the financial year 2021, there could be further Lockdown(s) that may be required in the weeks after December."
See related articles:
Rishi Sunak extends Furlough Scheme for another month [17 Dec 2020]
How does the extended Furlough scheme work?[BBC News, 5 Nov 2020]
Second Lockdown - What employers need to know [3 Nov 2020]
BBC News Announcement [5 Nov 2020]
Financial Support for Your Business - see the Government's Online Calculator
Job Retention Bonus - the original scheme, now scrapped
View all
