5 May 2020

The government Job Retention Scheme (JRS) opened for claims on 20 April. Based on the latest data over 800,000 employers have submitted claims, but the expectation is that many more will do so over the life of the scheme.

The government Job Retention Scheme (JRS) opened for claims on 20 April. Based on the latest data over 800,000 employers have submitted claims, but the expectation is that many more will do so over the life of the scheme.

The scheme undoubtedly provides valuable support for employers including those in the social housing sector, but many employers have queries over eligibility and the claim process.

As a recap, the scheme launched on 20 March and was originally intended to run from 1 March until the end of May. It has now already been extended to 30 June, with the government not dismissing the possibility of a further extension.

Under the scheme employers can furlough employees and apply for a grant that covers 80% of an employee’s usual wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions. The scheme is primarily designed to enable employers to retain employees despite the challenges of the coronavirus outbreak.

We will be hosting a slot at the HR and People Development in Housing virtual conference on 21 May to provide an overview of the scheme and answer questions about claims and related employment issues. Ahead of that, here is a summary of some of the initial queries and challenges that we are seeing.

Does an employer have to demonstrate that furloughed employees would otherwise be made redundant?

The government guidance suggests that whilst the scheme is primarily designed to enable employers to retain employees that would otherwise be made redundant, a claim is not conditional on demonstrating this. The guidance confirms that all employers are eligible to claim under the scheme and states that “the Government recognises that different businesses will face different impacts from coronavirus.”

Are housing associations eligible to make a claim under the job retention scheme?

The government guidance states that employers receiving public funding for staff costs should not furlough them. In most cases housing associations do not receive public funding for staff costs, so are not excluded from applying, but it is important that each association considers its own position before submitting a claim.

What employee wages can be claimed for?

A claim should be based on 80% of an employee’s usual wage costs, up to £2,500 a month, based on reference salary - excluding anything that is not regular salary or wages, such as discretionary overtime and benefits in kind. Where a salary sacrifice arrangement is in place it is important that the post-sacrifice salary is used as the reference salary. Employers can also claim the associated Employer National Insurance contributions and pension contributions. Different calculations are used to calculate the claim depending on whether an employee is on fixed or variable pay. There is an additional step needed where top up payments are made or where you have a part-worked, part-furloughed period. For further details see our latest webinar

Is there anything else to think about before making a claim?

There are a number of considerations around the practicality and process of claims that we will cover at the conference on 21 May and we will be interested to hear your experiences. It’s also really important to consider the employment law obligations in relation to furloughed employees. Further details can be found here.

For regular updates on the scheme and other support for businesses please visit our website.

Find out more about booking your place at the HR and People Development in Housing Conference and Exhibition, which will be held on our virtual events platform on Thursday 21 May.

David Williams-Richardson

David is a Partner at RSM.

David has over 20 years’ experience advising on a range of employment tax compliance and advisory issues for the social housing sector. Prior to joining RSM he worked for one of the ‘Big 4’ accountancy firms where he worked as the employment tax specialist within the social housing team. David has worked with a number of RP’s including several in the G15 as well as smaller regional Housing Associations.

Job Retention Scheme – considerations for HR professionals