Today’s briefing, from Chancellor Rishi Sunak, set out the changes to the Job Retention Scheme and how the scheme for furloughed employees would change over the coming months, before eventually ceasing at the end of October.
With the easing of lockdown measures, there is a clear direction in how the Government is balancing safety with the economy.
It is easier to view these phased changes month by month:
- June & July – the scheme will operate as currently for employer claims
- August – the 80% claim will still exist, with employers having to foot the employer’s National Insurance and pension contributions
- September – the 80% will fall to 70% claimable, with employers having to pay the extra 10% to any furloughed employees
- October – the 80% falls a step further to 60%, with employers having to pay the extra 20% to any furloughed employees
- November – the scheme will be closed with no support
Some important things to note:
- From 1 July (previously announced to be 1 August) it will be possible to be part-time furloughed. For example, if an employee has a normal five day working week, the employee can work two days per week (and be paid normally by the employer), and be furloughed for three days (with the employer being able to claim for the three days of non-working time).
- No new entrants will be allowed to the scheme after 30 June. Therefore to qualify after three weeks, the employee needs to be placed on furlough by 10 June.
He also mentioned that further support would be available to the self-employed, with the Self-Employed Income Support Scheme being opening again in August for a second and final time, with grants being calculated on a maximum of £6,570 @ 70%.
The part-time changes are a welcome addition and acceleration as we hear a lot of clients struggling to judge when someone may be needed back. The phasing out of the scheme always needed to happen as it was simply unsustainable given the costs involved, so this seems a sensible and careful withdrawal of the relief.
To find out more, join our After furlough – what happens next webinar on Thursday at 11am. Email firstname.lastname@example.org for login details