Employer’s must remember to adjust a member’s pensionable hours and the employer and employee contributions paid (but not the rate of contributions paid), should the member’s furloughed pay change in line with furlough scheme or the employer’s circumstances.
Please see the example where a member’s pay was previously restricted to £2,500 due to their earnings and has now been amended for the September reduction to the CJRS:
Example:
From September a full-time member who has pensionable pay of £40,000 will only receive furloughed (pensionable) earnings of £2,187.50 per month i.e. 70% of their normal pensionable pay up to a cap of £2,187.50.
For a member who has pensionable pay of £40,000 they will receive £2,187.50 x 12 = £26,250 / £40,000 x 100 = 65.625%
Whilst on furlough the member will receive 65.625% of their full-time hours whilst classed as part-time. For example, if they would typically work a standard week of 37.5 hours, they will be deemed to have worked 25 hours per week (37.5 x 65.625% = 24.6 hours rounded up to 25).
For a part-time member they will receive 65.625% of their contracted hours i.e. for a member who normally works 30 out of 37.5 hours per week, they will be deemed to have worked 20 hours per week (30 x 65.625% = 19.6875 hours rounded up to 20).
Please note, the greater the reduction in the member’s pay and the longer the time they are on furlough the more likely this is to affect the member’s benefits.