I am delighted that the Chancellor has announced plans to extend the Self-Employment Income Support Scheme (SEISS) and clarified the steps to extend the Coronavirus Job Retention scheme which has helped millions of jobs and supported one million employers across the country.
Self-Employment Income Support Scheme
This is to be extended, giving more security to individuals whose livelihoods are adversely affected by coronavirus. They will be able to claim a second and final grant in August worth 70% of their average monthly trading profits paid out in a single instalment and capped at £6,570 in total.
So far 2.3 million claims worth £6.8 billion have already been made to the original grant announced on March 27th.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme is also to be extended and will include the flexibility to bring furloughed employees back part time in July (a month earlier than previously announced). Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them and be responsible for paying their wages while in work.
From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80% of people’s salaries. In the following months, businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.
This is the timetable of how it will work:
- June and July - The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
- August - The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
- September - The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
- October - The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.
So far, the CJRS has helped 1 million employers across the UK furlough 8.4 million jobs and therefore protecting people’s livelihoods.
