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Furlough scheme extended and Job Support Scheme temporarily suspended
Following days of speculation, a second lockdown was announced by the Prime Minister on 31 October 2020 and will come into effect on 5 November 2020. As a result of the re-introduction of tighter restrictions, the furlough scheme, which was due to expire on 31 October and be replaced by the Job Support Scheme, will now be extended until December.
Under the continued Coronavirus Job Retention Scheme (CJRS), the support available to businesses will be set at the same level that was available in August, with the Government paying 80% of wages for those who cannot continue to work as normal, up to a ceiling of £2,500. As previously, the option for employers to adopt flexible furlough practices will be permitted alongside the placing of employees on full-time furlough.
It is the intention of the Government to then introduce the Job Support Scheme as soon as the extended period of the CJRS ends at the beginning of December.
To be eligible to access the continued CJRS, neither the employer nor the employee needs to have previously used the scheme. Support will be available in respect of employees who were on the employer’s PAYE payroll before 31 October 2020. Employers can claim support for the hours that their employees are not working, calculated by reference to their usual hours worked in a claim period.
Applications made by employers under the CJRS must be for a minimum period of seven consecutive calendar days. Employers will continue to pay the wages of employees for any hours worked as normal and still pay employer NICs and pension contributions. In line with the structure of the furlough scheme up to now, employers have the option to top up employee wages above the Government contribution of 80% if they wish.
A further announcement is expected imminently outlining when claims can commence to cover employee wage costs through November. However, the Government has already confirmed that there will be no eligibility gap between the previous scheme and its extended version.
We strongly advise that any new furlough arrangement with staff is agreed in writing. If you need any assistance with the furlough agreement or have any other queries, please do not hesitate to contact a member of our Employment team.