Government’s furlough scheme changes tomorrow

From tomorrow, employers will be required to contribute towards the cost of their furloughed employees’ wages.

The Coronavirus Job Retention Scheme was introduced at the start of the pandemic to protect and pay people who were unable to work due to lockdown.

Currently, employers can claim up to 80% of a workers’ salary up to £2,500 a month. They were required to make National Insurance and pension contributions.

From July 1, the government will pay up to 70% of an employees’ wage, capping at £2187.50, for the hours an employee is on furlough. Employers will now be required to top up the wages to ensure a furloughed employee is still earning at least 80% of their wages.

The rules will change again in August, where the government grant will reduce to 60% and employers will have to make a 20% contribution to wages.

The same will apply September with the scheme coming to a close on September 30.

Official figures show that there are currently 3.4 million people currently on furlough, with a total of 11.5 million jobs supported by the scheme during the pandemic.

Freelancers and those who are self-employed have not been covered under the furlough scheme for the duration of the pandemic.

The government’s Self-Employed Income Support Scheme was introduced to help workers in these categories – offering grants calculated at 80% of three months’ average trading profits, capped at £7,500 in total.

These grants have been available at four points throughout the pandemic so far, with a fifth grant (covering May 2021 to September 2021) open to claims from late July 2021.

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