Posted on: 16 September 2020
What support is available once the Coronavirus Job Retention Scheme finishes?
During the 2020 summer economic update, and again in September , Chancellor of the Exchequer, Rishi Sunak announced that the furlough scheme support would have to come to an end at some point soon.
Mr Sunak said that the scheme would be ending in October 2020, and wasn’t to be extended. He stated that the scheme has already cost the UK almost £35bn between April and August 2020, and the British taxpayers shouldn’t carry on funding the wages for jobs that may not exist post-COVID-19. However, there was pressure from MPs from all around the House of Commons to extend the scheme post-October.
Despite this, the scheme will be ending soon, so we are taking a look at what you can do when this government funding stops.
Support for your business as furlough funding ends
As the furlough scheme comes to an end, you may need additional support to keep your business running. Take a look at some of these support options.
New Job Support Scheme
As the furlough scheme ends, the government will introduce a new scheme that will support businesses in bringing furloughed employees back into work.
If an employer brings back a worker for a minimum of a third of their normal hours, the employer will need to pay a third of the normal wage, with a further third of the lost hours being split between the employer and the government. This means that the employer will pay 55% of their employees’ wage, with the government contributing 22%, giving an employee 77% of their overall salary, whilst working reduced hours.
The scheme will last for 6 months starting from 1st November, and businesses claiming this support will still be eligible for the Job Retention Bonus, which we will talk about later. For more details on the Job Support Scheme, click here.
A scheme that the government has pushed as the replacement to the furlough scheme is the Kickstart Scheme for young people ages between 16-24, whose career prospects are thought to have been hit the hardest by the COVID-19 pandemic.
The scheme will pay the salary, National Insurance and pension contributions for a person aged between 16-24 for 6 months if a new role is created specifically for them. The scheme will pay for 25 hours a week on a role that pays at least the minimum wage, with the employer topping up additional hours if they want a full-time employee. Training fees must also be paid by the employer.
Any business is eligible and a business can take on as many employees as they want. The scheme has already started, and applications can be made to the government website for funding a new role for an eligible 16 to 24-year old.
Job Retention Bonus
The Job Retention Bonus is an incentive to bring furloughed employees back into work.
If an employee is brought back from furlough and kept in their role until the end of January 2021, your business will receive £1,000 for every employee that has been brought back into work. Your employee must be receiving at least £520 per month.
This is a viable option for many businesses, but for those who have struggled through the pandemic, or who haven’t been allowed to reopen, this scheme could be unsuitable.
Apprenticeship and traineeships
One staffing option to help your business is to take on an apprentice or a trainee. Apprenticeships and traineeships have been a tried and tested method of training people in an industry at a low cost for employers.
To encourage more businesses to take on apprentices or trainees, the UK government has pledged bonuses to UK businesses of:
- £1,000 for a trainee ages 16-24
- £2,000 for an apprentice aged 16-24
- £1,500 for an apprentice ages 25+
The funding is capped for up to 10 apprentices or trainees per business.
Further guidance for businesses
Take a look at some of these other articles that we have written to help your business as COVID-19 remains a threat:
- COVID-19: Can employees refuse to return to work?
- COVID-19 safety posters and signs for businesses
- How to prepare for a second wave of COVID-19
Further guidance for businesses
With Premierline, it’s simple to compare business insurance quotes online if you know your insurance requirements. However, if your needs are more complex or you need advice on the insurance covers that are right for your business, call us and we’ll be happy to help.
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