November 5, 2020
The Chancellor has just announced a further extension to the Coronavirus Job Retention Scheme (CJRS), meaning the support scheme will remain in operation until at least the end of March 2021. It was only a few days ago that the scheme was extended until December as a result of England’s new national lockdown and today’s announcement lays the groundwork for a much longer lockdown period than the Prime Minister has so far indicated. Let’s hope that isn’t necessary.
It isn’t entirely clear how the CJRS will work during this extended period. We do know that workers will receive 80% of wages (subject to the usual cap) for the duration of the scheme and contribution levels will remain the same until at least January (80% from the government with employers just covering pension and employer’s national insurance contributions). However, the Chancellor indicated that he may revisit this in January and ask employers to start contributing more (perhaps on a tapered basis like we saw between August and October 2020) depending on the circumstances at that time. It’s also been confirmed that the previously announced Job Retention Bonus (which we discussed in this week’s Worked Up)will no longer be available given that its purpose (namely to encourage employers to keep workers employed for a period following the end of furlough) has now fallen away with this latest extension. The government will apparently be offering a similar retention package in the future at the appropriate time – we can only assume at this stage that they will simply delay the same level of bonus until perhaps the end of June 2021.
Today’s news means that the CJRS will in effect have been in operation for an entire year at the end of March 2021 which is clearly more than anyone would have expected when we first went into lockdown back in March. The certainty this new extension brings will no doubt be very comforting for employers and workers. While the previously announced (and presumably now redundant) Job Support Scheme would have provided considerable protection until March 2021, it protected a smaller proportion of workers’ wages and was more complicated given that it applied differently depending on whether or not a business was forced to close due to Covid-19 restrictions.
As always, we’ll update you all further with any material developments in this area.