Thanks to our colleagues at GCVS for sharing the undernoted information in relation to upcoming changes to the Job Retention Scheme.
Job Retention Scheme
Change One – No new entrants
From 1st July only those who have already been furloughed for a minimum of three weeks by 30th June will be eligible for future support. They don’t need to actually be on furlough on the 30th June but must have been furloughed for at least three weeks by that. If you have a member of staff you want to furlough in future but haven’t yet done so, you will need to furlough them by 9th June to ensure they have completed a minimum of three weeks by 30th June.
Change 2 – Contributions are changing
From 1st August, employers have to contribute towards salary costs. From 1st August, 100% of the National Insurance and pension contributions for staff on furlough must be paid by the employer. From 1st September, the employer will also have to pay 10% of the salary. From 1st October this increases to 20% of the salary. The Scheme ends completely on 31st October.
Change 3 – Part Time Working & Part Time Furlough
From 1st July, staff can return from furlough on a part-time basis. This means furloughing staff part of the week and them working the rest of the week. They are You will need to pay your employee their pro rata full wage for the time they are working, and the pro rata furlough rate for the period they are not. Working hours on a weekly basis can be changed, if necessary.
Pension and National Insurance contributions need to be paid on the proportion of the time worked in July and from 1st August, all NI and pension contributions no matter what the employee is working need to be paid by the employer. The government contribution to the furlough payment will be as per Change 2, depending on
9th June Last day to furlough staff to ensure they are part of the scheme.
30th June Closing of scheme to new entrants.
1st July Staff can begin working part-time.
1st August Employers begin paying the National Insurance and pension costs for all staff.
1st September Employers begin paying 10% of salary plus all National Insurance and pension costs.
1st October Employers begin paying 20% of salary plus all National Insurance and pension costs.
31st October The scheme ends.
Part Time Working Example
Full time (35 hours) earning £500 per month. Furloughed and receive 80% of salary (£400). The organisation requires them to return to work for two days per week (14 hours, 40% of contracted hours).
Employer to pay staff member:-
• The proportion of their normal salary that covers the time they are working (40% x £500 = £200)
• Furlough rate (80%) for the proportion of the time they are not working (60% * 80% * £500 = £240)
Employer can claim from HMRC:
• July – £240 furlough salary plus 60% of total National Insurance and legal minimum pension contributions
• August – £240 furlough salary but none of the additional contributions
• September – 90% of the £240 (£216) and none of the additional contributions
• October – 80% of the £240 (£192) and none of the additional contributions