- Covid-19: Financial support for education, early years and social care
- Use of free early education entitlements funding during coronavirus (COVID-19) (Updated 20 July 2020)
What is the Coronavirus Job Retention Scheme?
The Job Retention Scheme is a government scheme where employers can apply for a government grant to cover a proportion of the monthly wages for furloughed employees. Furloughed employees are staff who are still employed, but not currently working.
More general information about the scheme is available here.
Who can access the Job Retention scheme?
The scheme only applies to settings who employ staff. This includes nurseries, pre-schools and childminders who employ assistants.
If you are a childminder with no staff, you will receive support from the government via the Self-employment Income Support Scheme, not the Job Retention Scheme. More information on that scheme is available here.
I receive government funding. Can I furlough staff?
If you receive a mix of government funding and private income, which most providers do, then the amount of government support you can claim through the Coronavirus Job Retention Scheme will now depend on how much of your income from government funding has reduced as a proportion of your ‘normal’ monthly income.
The government has previously said that providers should use February 2020 to represent a ‘normal’ month in terms of income. However, as of January 2021, providers can take the decision as to what would reasonably represent a usual monthly income.
How do I calculate how much support I can get for furloughed staff wages?
Let’s say a setting’s normal income is £10,000, with £4000 (40%) of government funding and £6000 (60%) coming from private income.
The government guidance states that where it is difficult to distinguish whether or not staff are funded through continuing public funding, then “the total proportion of staff (based on gross payroll) that are retained (for example, not furloughed) should, as a minimum, be equivalent to the continuing DSG funding, as a proportion of all income that the provider usually receives.”
So how does this work in practice?
Let’s say our example setting, which has a normal monthly income of £10,000, with £4,000 usually coming from government funding, saw income from government funding fall to £2,500.
£2,500 represents 25% of the total normal income of £10,000, which means that 25% of the setting’s payroll is NOT eligible for Job Retention Scheme. This means that, theoretically, 75% of the setting’s payroll is eligible for furlough support – however, the actual furlough claim would depend on how many staff the setting still needs to meet current demand.
If the setting’s government funding income was instead, say, £1,000, then theoretically 90% of the setting’s payroll would be eligible for furlough support (because £1,000 is 10% of £10,000, which means that 10% of the payroll is not eligible for furlough). Again, this is a theoretical maximum, and the actual number of staff furloughed would depend on the level of need for staff.
I operate more than one setting. Can I base my furlough calculations on the combined income/payroll of the whole group of settings, or does it have to be done on a setting-by-setting basis?
The Department for Education has confirmed to the Alliance that calculations can be done across a group of settings that are part of one business.
How do I work out which members of staff I can furlough if some are using flexi-furlough?
If you are furloughing some or all employees on a part-time or flexible basis, then you should first calculate out what proportion of your paybill is eligible for furlough support (using the steps outlined above - see 'How do I calculate how much support I can get for furloughed staff wages?'. You can then furlough employees whose wages for hours not worked add up to that amount.
For example, imagine a setting had three members of staff:
- Staff member A, who earned £1200 a month
- Staff member B, who earned £1000 a month
- Staff member C, who earned £800, but would like to be furloughed part-time on half their normal hours. This means that the value of their hours not worked would be £400 per month.
If this setting had calculated that it could apply furlough support to, say, £1600 of its wage bill, this means that it could fully furlough staff member A, and flexi-furlough staff member C on half their normal hours (because £1200 + £400 = £1600).
I have so few children attending my setting that I’ve had to take the business decision to close and so have lost all funding. What support can I get from furlough?
In this situation, government funding is zero, meaning that 0% of your payroll is not eligible for support i.e. 100% of your payroll IS eligible for furlough support. This means you can access the scheme fully.
However, the government have stated that the intention of the Job Retention scheme is to support business where they have seen a reduction in income due to Covid-19 – this could be because of a severe reduction in demand as in this example, a landlord not allowing access to your normal premises, or a government directive to close. As such, the scheme would only apply as above if a provider had no choice but to close for, for example, business, logistical or regulatory reasons, not if they themselves had taken the decision to close for another reason.
When applying for the Job Retention Scheme you need either a UTR or CRN or Corporation Tax Unique Taxpayer reference. As a charity pre-school we do not have those references. What should I do?
Where an organisation has a CT UTR, SA UTR or CRN, they must enter it when making a claim. For those entities such as charities that don’t have one or more of those references, they should enter “no” into each of those fields and they will be asked for their employer name, which they must then enter. The HMRC guidance says:
You also need to provide either:
- your name (or the employer’s name if you’re an agent)
- your Corporation Tax unique taxpayer reference
- your Self Assessment unique taxpayer reference
- your company registration number
Read the full guidance - Use of free early education entitlements funding during coronavirus (COVID-19)
We know that there are many other questions on how this scheme will work in practice. For example queries on what exactly can be counted as ‘private income’.
These, and the many other questions we have received, have put to the Department for Education, who are currently in the process of putting together answers to each of them. In the meantime, please continue to send questions you have to firstname.lastname@example.org so we can push for answers to these too.
Webinar: Furloughing for the early years