The Furlough Scheme Changes – The Headlines

Coronavirus, Payroll,

Rishi Sunak announced Furlough Scheme changes (otherwise known as the Coronavirus Job Retention Scheme) just before lunchtime today (12th May). Business owners were rightfully concerned that the scheme may be significantly altered, given the Chancellor’s comments last week that the scheme was ‘unsustainable’.

As yet, the guidance hasn’t been updated, but here’s what we know so far about the Furlough Scheme changes:

  • The Scheme has been extended to October.
  • Employees will continue to receive 80% of their salary, up to £2,500.
  • Employers will have to pay ‘a share’ of that amount from August, with the Government making up the rest. (Please note: This was originally reported as 50% of the 80% being paid by each of the employer and the Government, but the most recent publication on the site does not show a figure.)
  • All sectors and regions of the country will continue to be eligible for the scheme.
  • There will be greater flexibility to come, to support the transition back to work.
  • Employers using the scheme will be able to bring employees back to work on a part-time basis from August.

August is the key date for the changes to take effect, giving business owners 10 weeks to plan for them.

As soon as we know more about the detail of how to work within the amended scheme structure, we’ll pass it on to you. Realistically this is likely to be tomorrow at the earliest.

For now at least we know that businesses have some breathing space and there is no need to worry that the ‘unsustainable’ scheme may be withdrawn. With careful planning, the Furlough Scheme changes may be a real benefit to businesses.

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