Effect of furlough on employer's Levy fund

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Home Forums Data issues Effect of furlough on employer's Levy fund

This topic contains 4 replies, has 4 voices, and was last updated by  Martin Locock 8 months, 1 week ago.

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  • Martin Locock

    Will employers who put some of their staff on furlough reduce their wage bill by the 80% that is covered by the government grant? If so does that mean that their Levy contributions will drop? If so it is likely that their Levy may become over-committed.


    Frances Hill

    Crikey, hadn’t thought of that. Following………


    Sue Bishop

    That’s entirely possible, but if you check your co-investment report monthly, then you can invoice the co-investment contribution. Only potential problem here would be if you didn’t have a procured non-levy contract, what effect might that have?




    OK, so, their wage bill is only going down if they’re paying people less money, it doesn’t, as far as I’m aware, matter that 80% of that is coming from the government. So, if they’ve reduced people’s wages to 80%, then there will be a reduction in how much is going into the levy pot (particularly if this reduces their overall payroll to less than £3M).

    HOWEVER, anyone who STARTED as Levy funded REMAINS as levy funded, even where there is no (new) money in the pot, so we don’t need to worry about needing procured non-levy contracts for learners who are already on-programme (we just need to worry about getting the 5% off the employer!). This has been the case since May 17.

    Might get a bit weird around new starts, not quite sure what the lag is on employers dropping out of Levy, particularly where, at this point in time, it’s not necessarily permanent…


    Martin Locock

    Thanks Steve- yes if the furlough pay is counted as payroll then it won’t have an enormous impact.

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