At the beginning of July, the Chancellor announced a scheme known as the Job Retention Bonus, to help employers across the country save jobs wherever possible.

The bonus relates to employees who have been furloughed, and who might otherwise be made redundant rather than being brought back into the business. If the employer brings those people back and employs them between November and January – November being the month after the furlough scheme ends – the government will pay the business a bonus of £1,000 for each worker.

In order to qualify for this bonus, the employee must earn at least the lower earnings limit for national insurance – currently £520 per month – during the entire period. The scheme is designed to help employers retain staff who would otherwise be at risk of redundancy.

Worries about bonus abuse

The announcement, which the Chancellor said could amount to a £9bn support package if the bonus was claimed for all furloughed workers, has led to some concern that employers may claim the bonus even for staff whose jobs are not at all at risk.

In fact, a range of national brands have already said that they wouldn’t be claiming the bonus, and developer Barrett Homes said that not only would they not claim the bonus, they would also pay back the furlough money claimed from the during lockdown.

Will you claim?

If your business has been considering redundancies because of the financial impact of lockdown – or because you have discovered that you may be able to run your business more efficiently with fewer people – this might help you to keep those jobs secure for a little longer. This gives you the chance to get back to business, improve your cash flow and perhaps keep some of those jobs in the long term.

Conditions for the scheme

  • Your employee must have been furloughed on the existing Job Retention Scheme and HMRC must have made a payment to you in respect of that employee.
  • The employee must return to work from furlough in November and be continuously employed until January 31st 2021 at the earliest. Those workers who have already returned from furlough may also qualify the employer to claim on the bonus scheme.
  • The employee must earn an average of more than £520 per month before tax during this period.

Advisers and business experts have expressed hope that the process of applying and receiving the claims is not too bureaucratic, so that businesses who have taken employees back can be sure of getting the bonus promptly in February 2021, when it is due to be paid.


Have you been considering redundancy for some of your employers? Has this news changed your plans? If you are still contemplating redundancies, you’ll need to make sure you follow the correct processes, including fair selection – for help and support, contact us today.