Home News & views Government announces new Coronavirus Job Retention Scheme and further benefit changes
Monday 23 March 2020
On Friday, the government announced the ‘Coronavirus Job Retention Scheme’, a new type of financial support to help employers carry on paying their workers.
If your employer agrees to ‘furlough’ you i.e. to keep you on payroll rather than lay you off, they can apply to HMRC for a grant to cover 80% of your salary (up to a total of £2500 a month). You will remain employed while furloughed although you cannot undertake any work for your employer during this time.
Your employer can choose to make up the extra 20% of your wages but is not obliged to do so. If they choose not to, you should seek advice about whether you qualify for any income related benefits to top up your reduced earnings. This will depend on your individual family circumstances. If you already get income related benefits such as Housing Benefit or tax credits these may be increased as a result of your lower earnings. Alternatively, you may be able to claim Universal Credit instead. You can find out if you might qualify for any additional income via benefits by accessing the Turn 2 Us calculator on the Contact website.
The Coronavirus Job Retention Scheme is an entirely new type of financial support and detailed information about it isn’t yet available. For instance, how this will apply to those on zero hours contracts is not yet clear. The government says that it intends the scheme to run for at least 3 months from 1st March 2020 but will extend it if necessary. It will be a few weeks until the scheme is up and running properly but grants can be backdated to the beginning of March 2020.
The scheme only applies to employees and not to self-employed people.
If you are unable to work because your children’s school or nursery has closed you will not be covered by the Coronavirus Job Retention Scheme unless your employer agrees to furlough you.
The government also announced a series of new changes to the benefits system. These include:
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