As part of the 2021 Budget back in March, the Chancellor of the Exchequer, Rishi Sunak, announced that the furlough scheme, officially called the Coronavirus Job Retention Scheme (CJRS), would officially be extended for another five months before ending in September 30. Here’s all UK firms need to know about this extension:
How the furlough scheme is continuing
For the most part during this extension, the way the furlough scheme operates will remain unchanged, with flexible and full furloughing both potential options. According to the government, assistance through the furlough scheme will be accessible where coronavirus, as well as the required measures necessary to limit and prevent its transmission, have negatively impacted employment activities.
The established categories of employees that companies are able to make claims on behalf of through the furlough scheme will not change. Up until the end of the CJRS, any staff members who have been furloughed in line with its terms will keep receiving 80 per cent of their designated earnings for any hours that they do not work. This sum will still be capped at £2,500 a month.
The government has also confirmed that until end of June this year, it will continue reimbursing employers for the full 80 per cent grant currently in place for any hours that staff members have not worked, which is again capped at £2,500 a month.
Important amendments to the furlough scheme firms must understand
When June ends, there will be changes to the responsibilities of employers who are benefitting from the furlough scheme. In the months of July and August, employers will need to begin contributing 10 per cent towards their workforce’s furlough payments for any hours unworked, which will rise to 20 per cent in September.
These contributions are on top of any other worker payments employers are also responsible for, such as pensions and National Insurance.
As was the case prior to the announced furlough scheme extension, employers are entitled to top up their staff member’s salaries, making up any deficit not covered by the government’s assistance through CJRS.
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