On 8th July 2020, The Chancellor of the Exchequer Rishi Sunak set out a ‘Plan for Jobs’ as part of the Summer Economic Update to announce new measures to combat the impact of COVID-19 on the UK economy.
Within the Plan for Jobs, a number of new policies were announced to support jobs with help to find work, protect jobs in the worst hit sectors such as hospitality and create new jobs.
One of the key points from the Plan for Jobs was the ‘Job Retention Bonus’, a one off payment of £1,000 for UK employers who retain the services of each furloughed worker until the end of January 2021.
Find out more about the Job Retention Scheme and how it impacts employers who have used the furlough scheme in our latest blog post.
What Is the Job Retention Bonus Scheme?
The Job Retention Bonus Scheme is a bonus scheme for UK employers relating to the Coronavirus Job Retention Scheme (CJRS), otherwise known as the ‘Furlough Scheme’.
Under the bonus scheme, UK employers will be paid a one off payment of £1,000 for every furloughed employee that remains continuously employed until the end of January 2021.
With 9.4 million employees currently on the Government’s furlough scheme, up to £9.4 billion has been set aside for the bonus, making it the largest policy decision within the Plan for Jobs in terms of cost.
The employer can apply for the bonus after 31st January 2021 with the bonus paid in February 2021 if the following conditions are met:
- The employee has been continuously employed until at least the 31st January 2021.
- The employee was furloughed under the CJRS and the employer has claimed for CJRS at some point for this employee.
- The employee earns a minimum of £520 per month on average during November 2020, December 2020 and January 2021.
The scheme will be available to all UK employers regardless of size, some larger companies such as Primark have already said that they will not take advantage of the scheme.
Why Has the Bonus Scheme Been Introduced?
Whilst the Coronavirus Job Retention Scheme (CJRS) has been extremely popular and effective for UK employers and employees, some fear redundancies as Government contributions gradually decrease until the scheme ends.
With this bonus for employers, the Government are encouraging employers to keep staff on instead of making them redundant.
“One of the most important things we can do to prevent unemployment is to get as many people as possible from furlough back to their jobs.” Rishi Sunak – Chancellor of the Exchequer
When Does the Coronavirus Job Retention Scheme End?
The CJRS is due to close on the 31st October 2020. Before this date, there will be gradual changes to Government contributions, meaning employers will have to start contributing a larger amount of employee wages to make them up to 80%.
Read our blog post to find out more about upcoming changes to the Coronavirus Job Retention Scheme.
Need a Hand?
Throughout the Coronavirus pandemic, we have supported many employers with successful furlough reclaims and our staff have kept up to date with the latest announcements including the Job Retention Bonus. We hope that all businesses are able to utilise the schemes available to support them through this difficult time.
- Is Your Business Ready for the July 2021 Furlough Scheme Changes? - June 10, 2021
- Making Tax Digital – Latest Updates & Timeline - May 18, 2021
- Budget 2021 – Key Points & How They Impact You - March 8, 2021
This post was written by Steph Roffey