Today, I am going to outline the evolution and intended future of the Co-Funded Payroll Scheme as we continue to navigate our way through the economic impacts of the COVID-19 pandemic.
Following approval from the Council of Ministers, the scheme will move into its third phase at the beginning of September. It will continue to operate until at least December and, subject to the approval of the new Government Plan by the States Assembly, until March 2021.
During this period, the scheme will be gradually phased out in terms of the amount of financial support a business will receive for each employee.
This extension is of great significance.
By the current forecast end date, in March next year, the total scheme is estimated to provide almost £140 million in financial support for local businesses.
This makes Jersey’s payroll scheme one of the most comprehensive in the world, and is more substantial than similar support provided in most other jurisdictions.
It notably gives more support than was made available under the UK’s furlough scheme and job retention bonus.
It is designed to give businesses the certainty of some continuing economic subsidy from the Government, as gradual economic activity returns and trading adapts to a new normal.
The Government appreciate that at this time, that continued support is critical to business confidence and getting the economy going again.
Currently the scheme pays 80% of employees wages up to a contribution of £1600 per employee. In September and October, the subsidy provided by Government will initially reduce to 60% of an employee’s wages, and then this will further reduce to 40% in November and December, 30% in January and February 2021 – if funding is approved – and 20% in March.
Additionally, the detriment test, which determines whether a business is eligible under the scheme, will be lowered from 30% to a 20% reduction in turnover compared to the previous year - allowing more local businesses to qualify for support.
This will invigorate economic recovery and allow more businesses to be supported as economic activity returns and subsidies gradually reduce.
There will also be no change to eligible businesses, and, importantly, for claims beginning in August, businesses will be able to claim for new or different employees, if either they were on another social security schedule in March 2020, or they are entitled to work in Jersey.
Businesses will, however, be required to return to broadly normal trading patterns and will not be able to remain closed or artificially restrict revenue.
We see this as an important step in Jersey’s economy recovering and we want businesses to have the confidence to return to trading.
As has been the case throughout the pandemic, Ministers will continue to monitor the scheme and will be flexible to amend its operation, should there be a change in the level or spread of the virus in Jersey, which impacts upon public health restrictions and the ability of businesses to effectively trade.
Further information on the next phase of the scheme, including updated guidance for businesses, will be available online as soon as possible.
Government of Jersey News.