BUDGET BOOST
Employers to get £1,000 bonus per worker they re-employ from furlough in £9billion mini-Budget boost
BUSINESSES who re-employ furloughed staff will get a £1,000 bonus per employee from the government to help keep Brits in work.
The move was announced today by Chancellor Rishi Sunak as part of an incentive for bosses to keep people employed following the coronavirus crisis.
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Speaking in what's being dubbed as a mini-Budget, Mr Sunak said employers will qualify for the Jobs Retention Bonus when they bring someone back from furlough.
To get the bonus, bosses must pay each worker at least £520 per month on average, and continuously employ them through to January 31.
Employers will get £1,000 for each qualifying furloughed worker that they bring back.
The government was previously warned how unemployment will hit five million unless urgent steps are taken to help businesses survive.
What was announced in the mini-Budget?
CHANCELLOR Rishi Sunak has announced a £30billion "plan for jobs
The changes were announced in what's been described as a "mini-Budget" following the coronavirus.
Here's what the Chancellor announced:
- Young people hired by firms will get their wages subsidised by the government under its £2billion Kickstart Scheme
- House buyers will see stamp duty cut on homes up to £500,000 until next year - we've explained how it will work
- Households will get £5,000 in energy saving vouchers to help them insulate their homes - here's what you need to know
- Businesses will be given a £1,000 bonus for each employee they bring back from furlough
- Pubs and restaurant bills will be slashed by £10 a head in August
- VAT will be cut from 20 per cent to 5 per cent for businesses in the hospitality and tourism industry
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What is furlough?
THROUGH the furlough scheme, the government pays 80 per cent of the wages of an employee who can’t work because of coronavirus.
Payments are capped at a maximum of £2,500 a month meaning higher-earning furloughed workers will get less than 80 per cent of their normal salary.
Some employers choose to make up the difference in wages so staff don't lose out - but they don't have to do this.
The government also pays the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on top.
The scheme has been extended to run until the end of October (although businesses will be asked to chip in from August) and can be backdated to March 1 2020.
It’s was initially available to all employees that started a PAYE payroll scheme on or before March 1, 2020.
But the government changed the rules from July saying that businesses could only claim for staff that had been furloughed for three weeks prior to July 1.
Firms who want to access the scheme will need to speak to their employees before putting them on furlough.
While on furlough, staff should not undertake any work for their employer during the scheme.
You can ask your employer whether you are allowed to look for work elsewhere during this time. It's not against the furlough rules but you need to check you aren't in breach of contract.
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This shocking figure is the same as almost one in seven people being out of work, or 14.8 per cent of the population, according to the Organisation for Economic Co-operation and Development (OECD).
The Office for National Statistics (ONS) also released damning new numbers showing at least 600,000 people have lost their jobs nationwide due to coronavirus.
More than 3.2 million people have also started claiming Universal Credit since the start of the lockdown, the ONS data shows.
Around nine million employees have been furloughed due to the pandemic, meaning the government could potentially pay out £9billion to businesses.
'I'm disappointed they've ruled out extending furlough'
FURLOUGHED festival promoter Grace Flynn, 25, says she’s disappointed the furlough scheme hasn’t been extended and worries about the future of the arts industry.
She has seen dozens of friends and colleagues in the industry lose their jobs in recent weeks.
Grace says extending furlough is the only “viable option” for helping to save thousands of jobs in the arts.
She said: “This cash bonus will be welcome by many but does not help the struggling live music industry at all.
“Businesses are already struggling to keep employees on furlough until October as they are unable to make contributions to pay with no income from venues and events whatsoever.”
“I am disappointed they have ruled out extending furlough."
Grace, who lives in London, was put on furlough at the beginning of lockdown.
She said: “Our industry is reliant upon people going out and can’t exist with social distancing measures in place.
“Even as lockdown is eased, festivals, nightclubs and music events are going to be some of the last things we see reopen.”
The Chancellor also confirmed he won't be extending the furlough scheme, which is due to end in October.
The government will begin to wean off its support from next month, where employers will be expected to contribute national insurance and pension contributions from August - previously, the government would foot this bill.
Then in September, they'll have to pay 10 per cent of salaries as well, before this increases to 20 per cent of salaries from October.
The scheme was first launched on March 20 to help keeps Brits employed.
However, employees can still be made redundant while on furlough - sparking fears that thousands of people will lose their jobs if their boss can't afford to keep them on.
The scheme was initially meant to finish in July but the Chancellor extended this deadline in May - although applicants to join the scheme closed on June 10.
Addressing the House of Commons today, Mr Sunak said: "If you’re an employer and you bring back someone who was furloughed - and continuously employ them through to January - we’ll pay you a £1,000 bonus per employee."
"Its vital people aren’t just returning for the sake of it – they need to be doing decent work.
"So for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January - the equivalent of the lower earnings limit in National Insurance."
Businesses will get the bonus as a one-off payment, although the Chancellor hasn't said when it will be paid or how employers go about applying for it.
The Sun has asked the Treasury for more information and we'll update this article when we know more.
Mr Sunak said the government will spend £30billion as part of his plan to “recover and rebuild” the economy.
He warned that "hardship lies ahead" but insisted that no-one will be left "without hope".
In just two months the economy contracted by 25 per cent, the Chancellor said - the same amount it grew in the previous eighteen years.
The Chancellor earlier this month said the UK is facing a "never-seen-before coronavirus recession" leaving permanent damage to the economy, which has already shrunk by 5.8 per cent in March
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The retail, travel and hospitality industries have been particularly hard hit by coronavirus, with job losses and pay cuts being announced and some collapsing into administration.
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For example, British Airways has announced that up to 12,000 jobs are to be scrapped while Ryanair is axing up to 3,250 roles.
On the high street, Debenhams has gone into administration, and Cath Kidston, Oasis and Warehouse have shut their doors for good.
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