The Chancellor has this evening confirmed a number of changes to the Coronavirus Job Retention Scheme (CJRS). As announced previously the scheme will run until 31 October 2020 but it has been confirmed that employers will in future be required to contribute towards the 80% furlough wage:
June and July – The scheme will remain unchanged through June and July with the government providing grant support for 80% of the wages paid to furloughed employees (up to a maximum of £2,500 per month), plus the associated Employer National Insurance Contributions and minimum employer auto-enrolment pension contributions.
August – For furlough wages paid through the month of August and beyond, employers will be asked to cover the cost of the associated Employer National Insurance and employer auto-enrolment pension contributions.
September – For furlough wages paid through the month of September, employers will be expected to pay 10% of the wages for furloughed staff. If they are paying their employees 80% of their normal wages, this means that employers must pay 10% and the government will provide a grant for the remaining 70%. If the employer is paying normal wages in full then this means their overall contribution will increase to 30%. This is in addition to the employers national insurance contributions and employer pension contributions due on the furlough wages.
October – Finally, in October, employers will pick up 20% of the furlough wage cost and the government will pay a grant of 60% of the furlough wages.
From 1 November, employers will be required to cover the cost of their employee wages in full as normal.
The Government is also introducing a more flexible furlough scheme in July, with the ability to bring back employees on a part-time basis, whilst remaining on the furlough scheme. Further details on this will be announced on 12 June.