Chancellor Rishi Sunak announced on Friday the changes to Job Retention Scheme (furlough scheme) coming into effect from next month. Here’s the highlights of what is changing over the next few months and how it will affect you and your business:
• As the scheme will close to new entrants on 30th June, employers who want to place new employees on furlough must do so by 10th June so the minimum 3 week period required can be achieved
• The level of assistance in June remains the same as previous months
• From 1st July, flexible furlough can be used (a month earlier than planned). Employers will have “maximum possible flexibility” to decide on the right arrangements for them and their furloughed staff.
For example; an employee who works 5 days a week could come back to work 2 days a week and employer will pay wages for those days. The furlough scheme would continue to provide financial assistance regarding this employee for the other 3 working days.
• The level of assistance in July remains the same as previous months
• From start of August, employers will have to pay the national insurance contributions and employer’s pension contributions (this comes to 5% of total wage costs in average claim)
• From start of September, employers will have to contribute 10% towards the 80% wages of furloughed employees, plus NI and pension contributions as above. The Scheme will fund 70% of wage
• From start of October, employers will have to contribute 20% towards the 80% wages of furloughed employees, plus NI and pension contributions as above. The Scheme will fund 60% of wage
• The Scheme will close at the end of October.
More information about the scheme will be published on 12th June by the government, and as soon as we have this we will share it with you. In the meantime, you can check https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme for updates.
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Take care and stay safe.