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Govt. updates coronavirus job retention scheme advice

Employer auto-enrolment contributions and national insurance liabilities are covered under the coronavirus job retention scheme.

The scheme was announced last week by Chancellor Rishi Sunak and will be open for an initial three months, starting from 1 March 2020.

It enables employers to obtain grants to cover up to 80% of furloughed workers' wages, up to £2,500 a month.

However, the Department for Work and Pensions has clarified this further to alleviate pressure on employers.

Firstly, the grants cover whichever is the lower of 80% of a furloughed employee's regular wage or £2,500 a month.

It can also be used to claim employer national insurance contributions and minimum auto-enrolment employer pension contributions (3%) on that wage.

Steve Cameron, pensions director at Aegon, said:

"This will alleviate any pressure to suspend auto-enrolment contributions and will avoid affecting individuals' longer-term finances.

"While employers paying above the minimum will not be able to claim back these additional amounts, including the auto-enrolment minimum in job retention grants is a very welcome demonstration of the importance the Government places on ongoing retirement savings."

Claims will be made to HMRC through an online service, which should be up and running by the end of April 2020.