From 1 July 2020, staff on furlough under the Coronavirus Job Retention Scheme may work part of the time for their employer
For claims starting on or after 1 August 2020, employers will no longer be able to claim a grant for the statutory minimum automatic enrolment (AE) employer contribution
From September the Scheme covers 70% of pay up to a cap of £2,187.50 month, then reducing to 60% in October, capped at £1,875.
From September 1, employers must contribute towards the cost of furloughed employees’ wages to ensure they continue to receive at least 80% of their wages, capped at £2,500 per month for the time they’re on furlough
Kate Smith, Head of pensions At Aegon comments on the Pensions Regulator’s updated guidance: “Significant changes to the Government’s job retention scheme for the period from July to the end of October, when it’s then expected to close, means employers with furloughed workers will need to keep on top of these. At the moment employers can claim 80% of their employees’ pay, capped at £2,500 a month, but over the next four months they will have to pay a greater proportion as the scheme winds down.
“Currently employers can claim their own automatic enrolment contributions under the scheme, along with their national insurance contributions. This comes to an end in August when employers will revert back to paying their own auto-enrolment contributions. The Pensions Regulator has helpfully updated its guidance setting out how the changes to the scheme impacts employers’ pension contributions, including those paid by salary sacrifice. It’s likely that employers will find this an extremely challenging time as they will have to grapple will a new change to payroll processes each month from July and it will be easy to get it wrong.”
*https://www.thepensionsregulator.gov.uk/en/covid-19-coronavirus-what-you-need-to-consider/automatic-enrolment-and-pension-contributions-covid-19-guidance-for-employers
https://www.thepensionsregulator.gov.uk/en/covid-19-coronavirus-what-you-need-to-consider/automatic-enrolment-and-pension-contributions-covid-19-guidance-for-employers/covid-19-technical-guidance-for-large-employers
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