The rules of the new Flexible Furlough Scheme coming into place from 1st July have now been announced.
The Job Retention Scheme has been paying employers up to 80% for furloughed employees since it was announced in March. From our previous blogs you'll know that this has been extended until the end of October, with a few 'twists'. To see the rules and eligibility for the current Job Retention Scheme, see our previous post here.
Flexible Furlough Periods
The new Job Retention Scheme live from 1st July will require no minimum furlough period. Whereas previously employees had to be furloughed for a minimum period of 3 weeks, this has now been removed. Therefore, an employee could be furloughed one day, and working the next. You as the employer will be responsible for paying employees in full if they are brought off furlough, and the amounts you can claim whilst an employee is furloughed are shown below. This will help ease the burden of employers reopening for business and bringing back their employees to help. The rules on Flexible Furlough Periods can be read in rule here.
Employers will also need to report 'hours worked' and 'usual hours' to HMRC if employees are on a flexible furlough period.
Cut-off for furloughing employees
As the new Flexible Job Retention Scheme effectively replaces the old one from 1st July, for an employee to be eligible for the new scheme, they need to have been furloughed at some point on the old scheme (between 1st March and 30th June). This means that any employees who have not already had a period of furlough, must be placed on furlough by 10th June, in order to satisfy the minimum furlough period of 3 weeks to be eligible for the new scheme. It will not be acceptable for an employee to commence a new furlough period after 10th June which will then extend into July to make a 3 week furlough period, as the rules change from 1st July when the new scheme kicks in.
How much can you claim?
The financial support does not change for July and the government will continue to pay:
- 80% wage support up to £2,500 per employee
- Employers NIC and 3% pensions costs on furloughed hours
From August, the amount of support from the government will start to ease:
- August - 80% wages support, up to £2,500 per employee, but no employer NIC or pensions covered
- September - 70% wages support, up to £2,187.50 per employee, no employer NIC or pensions
- October - 60% wages support up to £1,875, no Employer NIC or pensions
This is the amount of grant employers can claim under the new JRS, however, employers must still pay employees 80% of their wages if they are furloughed. So, in September for example, if you have a furloughed employee, you can claim 70% of their wages from the government, and you'd have to pay 10% to bring this up to a total of 80% whilst that employee is on furlough. You'll also need to pay their employer NIC and pensions.
Job Retention Scheme Claim Deadline
The JRS is closed to new employers from 30th June. If you've not made a JRS claim before this time, you won't be able to make a claim under the new JRS from 1st July. Employers will also not be able to claim for any employee on the new scheme that was not included on the old scheme.
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