Last reviewed 5 November 2020
Only a few days ago we reported on the Chancellor’s decision to extend the Coronavirus Job Retention Scheme (CJRS) as a result of the Government’s decision to take England into a second lockdown (see Furlough extended as PM sets new national restrictions for England).
On 5 November, the day the new restrictions came into force, Rishi Sunak was back in the House of Commons explaining to MPs that he was now planning to offer “significant extra support to protect jobs and livelihoods in every region and nation of the UK”.
The CJRS will now run until the end of March 2021 with employees receiving 80% of their current salary for hours not worked. In addition, the next self-employed income support grant will also increase, from 55% to 80% of average profits — up to £7500.
The Government will not pay the Job Retention Bonus in February, as previously announced, but instead redeploy a retention incentive “at the right time”.
“It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support,” Mr Sunak said. “Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”
There are currently no employer contribution to wages for hours not worked.
Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked. For an average claim, this accounts for 5% of total employment costs or £70 per employee per month.
It should be noted that the CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.
The Chancellor also announced an increase in the upfront guarantee of funding for the devolved administrations from £14 billion to £16 billion. This will continue to support workers, business and individuals in Scotland, Wales and Northern Ireland, he said.
More information on the latest policy announcements can be found at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932977/ECONOMIC_SUPPORT_FACTSHEET_5_November.pdf.
The Job Support Scheme has been postponed.
CBI Chief Economist, Rain Newton-Smith, said: “Extending the tried and trusted Job Retention Scheme will give companies the certainty and stability they need to help safeguard thousands of jobs into March. Sectors and supply chains under the greatest strain may need more tailored support in the coming weeks.”