Tuesday, May 30, 2023

Employers to start paying share of furlough scheme

Screenshot 2020-05-29 at 18.18.44

CHANCELLOR Rishi Sunak has set out how employers will have to start sharing the cost of the Coronavirus Job Retention Scheme.

From August they will have to pay National Insurance and pension contributions, and then 10% of pay from September, rising to 20% in October.

Also, workers will be allowed to return to work part-time from July, but with companies paying 100% of wages.

Mr Sunak said the scheme will adjust so “those who are able to work can do so”.

The government is paying 80% of workers’ salaries up to £2,500 a month for some 8.4 million workers under the scheme.

It was originally intended to last until the end of July. Earlier this month the chancellor extended the scheme until the end of October, but did not spell out how employers would start contributing.

Under Friday’s changes, furloughed workers will continue to get 80% of pay until the end of October but by then, almost a quarter of their salary will have to be met by employers.

“Our top priority has always been to support people, protect jobs and businesses through this crisis,” said Mr Sunak. “The furlough and self-employment schemes have been a lifeline for millions of people and businesses.”

Employers’ claims under the scheme have reached £15bn so far. But the scheme is expected to cost a total of around £80bn, or £10bn a month. The Office for Budget Responsibility is set to publish detailed costings next week.


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