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Furlough Scheme Update - August -- October
The government's Furlough Scheme has helped to retain many jobs and saved many businesses from having to make painstaking redundancies during the recent pandemic. What will happen now that August is here, bringing with it the first phase of change to the scheme?
Read on to find out more.....
Furlough Scheme overview, August - October
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August - the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough
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September - the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed
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October - the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed. Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
£1,000 “Job Retention Bonus”
If an employer brings someone back who was furloughed and continues to employ them between November and January, the government will award a £1,000 bonus for each worker. Employees must earn at least the lower earnings limit for national insurance (£520 per month) between November and January in order for employers to be eligible for the pay-out.
Chancellor Rishi Sunak said that if the government paid the bonus for every one of the 9 million workers who have accessed the job support scheme since its inception, “this would be a £9bn policy to retain people in work”.
“If you stand by your workers, we will stand by you,” he said.
Announcing its Plan for Jobs package of measures, the government has said the UK was entering its second phase in post-pandemic recovery, and would now turn its attention to supporting jobs through skills development, creating jobs through infrastructure investment and protecting jobs through incentives for consumers to support tourism and hospitality businesses.
Sunak added that it would be “irresponsible” to keep the furlough scheme going past the end of October, when it is due to end, pledging to wind it down “flexibly and gradually”.
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Disclaimer: The information contained in this article is intended to be a guide and is not intended to be exhaustive. No action should be taken on the basis of information contained herein without obtaining the necessary advice. No responsibility can be accepted for loss or damages occasioned to any person acting or refraining from acting as a result of the material contained herein.
