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Financial sustainability Coronavirus

Coronavirus Job Retention Scheme extended into the spring

CFG's Policy Manager Richard Sagar takes a look at today's government announcement that the Coronavirus Job Retention Scheme will be extended.

Earlier today, the Chancellor announced that the CJRS will be extended until the end of March, with employees receiving 80% of their current salary for hours not worked. Employers will only need pay for National Insurance and employer pension contributions for hours not worked.

It is important to note that this extension will be reviewed in January to ‘examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.’

It will be useful to know what exactly qualifies as improving economic circumstances, and the extent to which the amount employees receive under CJRS will be tapered down accordingly.

The Chancellor also announced that the Jobs Retention Bonus (JRB) will not be paid in February and the government will redeploy a retention incentive at the appropriate time.

The job retention bonus which would have provided much needed relief for charities' cashflow, so it will be disappointing for some, but it is reasonable for government to hold off on this until the end of the scheme.

Important information about payment has been provided in the accompanying technical guidance. So we now know that claims can be made from 8am, Wednesday 11 November. Claims made for November must be submitted to HMRC by no-later than 14 December 2020.

HMRC will publish details of employers who make claims from December onwards under the extended scheme, with full details of this in the detailed guidance to be published next week.

As before, neither the employer nor the employee needs to have previously claimed or have been claimed for under CJRS to make a claim under the extended CJRS.

One important update is that employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for.

This is good news for charities who unfortunately had to make people redundant in Autumn when furlough was tapered down. Those former employees can be re-hired and re-furloughed under this scheme.

Overall, this is a very positive announcement from the Chancellor. For many charities uncertain about what would come after November, this will provide much-needed certainty into the spring. And that it is not being tapered off from 80%, with minimal contribution for employers is very good news.

If further restrictions are announced, including an extension to lockdown, government will not need to make continuous announcements of further support packages.

A scheme fit for purpose

The problem still remains that the CJRS has the perverse effect of incentivising mothballing of provision for charities rather than mobilisation, at a time when they are never more needed.

So with that in mind, CFG alongside a number of other civil society organisations, is calling for a time-limited scheme that enables organisations to furlough staff and allow them to volunteer their time and skills back to their not-for-profit, public benefit employer.

Find out more about our letter and campaign here where you can also sign our letter. We are urging all civil society organisations to sign up and join with us to urge the Chancellor to work with the sector. 

 

Links to guidance

There was also additional support for the self-employed and for devolved administration with an increase to the upfront guarantee of funding for the devolved administrations from £14bn to £16bn, on top of their Spring Budget funding. More information in this can be found here.

Technical guidance to accompany these announcements can be found here.

 

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