Changes to Furlough Scheme – 1 May 2021

Furlough
Share on email
Email
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on facebook
Facebook
Share on whatsapp
WhatsApp

The government has made several changes to the (furlough scheme) Coronavirus Job Retention Scheme (CJRS) from 1 May.

Currently, employees can only be furloughed if they were employed on 30 October 2020, if a PAYE Real Time Information (RTI) submission was made to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.

The new changes to the scheme now mean, for pay periods that start on or after 1 May 2021, employees who were employed on 2 March 2021 can be furloughed, provided the organisation has made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee.

The shift in eligibility from 1 May 2021 onwards was confirmed in government guidance on 3 March 2021, presumably because of the extension of the Job Retention Scheme until the end of September 2021.

The knock-on impact of this is that organisations will be granted much more flexibility in furlough decisions in the future; they will be able to furlough those who were recruited between 31 October 2020 and 2 March 2021, meaning the scope for furloughing staff is going to be wider.

Organisations will not have to have previously claimed for an employee before 2 March 2021 to claim for periods from starting on or after 1 May 2021.

Calculating claims for periods starting on or after 1 May 2021

Due to the change in eligibility highlighted above, the government is outlining updated guidance on how to calculate furlough pay.

It should be remembered that the government will still provide 80% of furloughed staff wages for the time they are not working in May and June 2021. They are not due to start reducing the amount they provide until 1 July 2021.

From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September, while the government will contribute the balance so that the employee will still receive up to 80% of their total salary.

Claiming for staff previously made redundant

For periods beginning on or after 1 May 2021, organisations will no longer be able to furlough staff who were previously made redundant.


Featured Image Attribution: Galina Vetertsovskaya/stock.adobe.com

Leave a Reply

Your email address will not be published. Required fields are marked *

Other Posts

Freeports

0% NICs for Freeport Employers

Employers located in Freeport areas will be able to take advantage of a zero-rate secondary National Insurance contributions (NICs). This forms part of the government’s

Read More »