What Happens After Furlough Ends?

Furlough is back and will now replace the proposed Job Support Scheme.

The Coronavirus Job Retention Scheme has been extended until March, but before that the government had outlined the new Job Support Scheme.

It’s important to understand that when furlough comes to an end the government will move back to the Job Support Scheme as intended.

Here’s all the information about what will happen after furlough ends!

What Happens After Furlough?

The 3 tier system meant that different areas of the country were under different rules when it came to operating a business.

Boris Johnson has already confirmed that the 3 tier system will be revisited, and some regions will have tighter lockdown restrictions than others.

So when furlough finishes up, and the national lockdown is lifted, the government will return to their planned Job Support Scheme.

The aim of this scheme is to help employers who are struggling due to the different coronavirus restrictions enforced in their region.

Therefore business owners should expect to make use of the Job Support Scheme, depending on the tier that their business is operating within.

What Is The Job Support Scheme?

All types of businesses will be able to apply for the Job Support Scheme, providing they have a UK, Channel Island or Isle of Man bank account and are enrolled for PAYE online.

Depending on the circumstances a business will have two choices:

  1. If a business can remain open and operate safely under the tiered restrictions in their area, then they can apply for the Job Support Scheme (Open).
  2. If a business is legally required to close under the tiered restrictions in their area, then they should apply for the Job Support Scheme (Closed).

Let’s take a look at the different types of eligibility.

Will You Be Eligible For JSS (Open)?

To be eligible for JSS (Open) the business’ employees must be working for at least 20% of their regular working hours, and their employer must be paying them for those hours.

For the remaining contracted hours that an employee does not work, the following applies:

  • the employer must contribute 5% of their remaining wages.
  • the government will contribute 61.67% of the remaining wages.

There will be a cap of £1,541.75 for each employee per month.

If a large business (with over 250+ employees) applies for this scheme they will have to undergo a financial assessment.

Will You Be Eligible For JSS (Closed)?

In order to be eligible for JSS (Closed) the business must have been forced to close due to local lockdown restrictions.

If an employee doesn’t work for a minimum of seven calendar days, then you’ll be able to claim assistance for their wages through this scheme.

Here’s how the JSS (Closed) scheme works:

  • The government will pay two-thirds of an employee’s wages.
  • The business will not be required to contribute anything towards these wages.
  • Employers will only have to cover National Insurance and Pension contributions.

There will be a cap of £2,083.33 a month for each employee per month.

Larger businesses will not have to undergo a financial assessment to claim the JSS (Closed).

Are Employees Who Work Irregular Hours Eligible?

If your business is applying for the (Open) scheme then you may have questions about your employees who don’t work ‘regular’ hours.

These employees will still be eligible for the scheme, but the hours they work will be calculated from the higher number from the following:

  • The hours they worked in the same calendar period of the 19/20 tax year.
  • Or, the average number of hours they worked from 1st Feb 2020 (or their start date if later) until 23rd Sept 2020.

Employers will also be able to claim on any rehired individual after 23rd September 2020.

This scheme will be open for all businesses, regardless of whether they have used the furlough scheme or not.

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