Changes to Furlough Scheme

Chancellor Rishi Sunak has today outlined changes to the Furlough Scheme. In June and July the furlough scheme will continue as before with the government covering 80% of wages up to £2,500, but from September employers will be asked to contribute towards staff wages.

Rishi Sunak has said furloughed staff will be able to work part-time in their old roles from July. Individual firms will decide the hours their employees will work on their return.

As indicated earlier this month, the subsidy will taper off from August, with businesses expected to pay a greater share of their staff salaries, starting with covering National Insurance and pension contributions.

From September the government will cover only 70% of salaries, to a cap of £2,190 and from October it will pay 60%, to a cap of £1,875. Employers will make up the shortfall to get salaries back to 80% of pre-Covid lockdown levels.

The chancellor says that more than one million jobs and businesses have been supported by the government as coronavirus hit the economy.

“As we reopen the economy, there is broad consensus… that the furlough scheme cannot continue indefinitely.”