Rishi Sunak has announced today that the Coronavirus Job Retention Scheme (CJRS) or ‘furlough’ scheme, will be extended until the end of April 2021, for all parts of the UK.

Originally the Chancellor had said he would review the employer contribution element of the CJRS in January “to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions”. However, he decided to bring this review forward in recognition of the fact that “business owners need additional certainty as we head into the New Year”.

The Government’s commitment under the scheme will remain unchanged with the Government continuing to cover 80% of employees’ salaries for hours not worked (up to a maximum of £2,500 per month). Employers will also continue to be required to pay National Insurance Contributions (NICS) and employer pension contributions for hours not worked as well as wages, NICs and employer pension contributions for hours that furloughed employees actually work.

The eligibility criteria for the scheme will remain unchanged.

This extension comes ahead of the Budget, which the Chancellor has confirmed will take place on 3 March 2021. The Chancellor is expected to provide a further update on wider Covid-19 economic support for businesses and recovery measures at that time.

For further details of how the extended CJRS will operate, see our previous blog post.

Contact us

If you have any queries about how the extended CJRS will operate and what it means for employer and employee pension contributions, please contact your usual HSF adviser or speak to one of our pension specialists.

 

 

Tim Smith

Tim Smith
Professional Support Lawyer, London
+44 20 7466 2542

Francesca Falsini

Francesca Falsini
Paralegal, London