The Chancellor unleashes the ‘Plan for Jobs 2020’ in the Summer Economic Update
08 July 2020
Today, Chancellor of the Exchequer, Rishi Sunak, delivered the Summer Economic Update, and unleashed his Plan for Jobs 2020. With much focus placed on kickstarting the economy and getting people back into work, a variety of measures were introduced.
Following on from the success of the Coronavirus Job Retention Scheme (CJRS), which will close at the end of October 2020, is the Job Retention Bonus. The Job Retention Bonus will provide a one-off payment of £1,000 to UK employers for every furloughed employee who is continuously employed up until the end of January 2021. In order to qualify, employers must pay employees at, or above, the Lower Earnings Limit (LEL), which is £520 per month for tax year 2020-2021. Payments will be made to employers from February 2021, and further information about the scheme is expected by the end of July 2020. The aim of the bonus is to incentivise employers to bring back, and keep, their furloughed employees. It is expected that the Job Retention Bonus scheme will cost the Treasury approximately £9.4 billion.
Another measure launched in a bid to protect employment, and to generate more jobs, is the Kickstart Scheme. This is a £2 billion fund which will create hundreds of thousands of jobs for individuals aged between 16 and 24 who are on Universal Credit and potentially at risk of long-term unemployment. The jobs will be six-month placements and the government will fund 100% of the National Minimum Wage (NMW) rate for 25 hours per week, in addition to the associated employer National Insurance (NI) contributions and employer minimum automatic enrolment contributions.
In order to encourage employers to hire new apprentices, the government will make a payment of £2,000 to employers in England for any apprentices they hire that are under the age of 25. Any employers who hire apprentices under the age of 25 will receive a £1,500 payment. This applies from 1 August 2020 up until 31 January 2021. These payments are in addition to the £1,000 payment that the government already gives to employers for new 16-18 year-old apprentices, and anyone aged under 25 with an Education, Health and Care Plan. The government will also provide employers who give trainees work experience a £1,000 payment per trainee.
For an update on further government measures introduced to restart the UK’s economy post-coronavirus, please see the CIPP’s news article here.
The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.