Furlough scheme extended until end of OCTOBER but Rishi Sunak unveils major changes

Furlough scheme extended until end of OCTOBER but Rishi Sunak unveils major changes

Chancellor of the Exchequer Rishi Sunak addressed MPs in the House of Commons today, announcing he was extending the Coronavirus Job Retention Scheme until October. During his announcement, he said that there would be no changes to the scheme until the end of July.

Mr Sunak said that among the changes were employers being able to bring back furloughed employees part-time, as well as employers being asked to begin sharing the cost of paying salaries.

However, the Chancellor insisted that furloughed workers would continue to receive the same level of overall support – 80 percent of their current salary up to £2,500 per month.

He said: “Employers currently using the scheme will be able to bring furloughed employees back part-time, and we will ask employers to start sharing with the government the cost of paying people salaries.

“Full details will follow by the end of May, but I want to assure people today, of one thing that won’t change.


“Workers will, through the combined efforts of government and employers, continue to receive the same level of overall support as they do now, at 80 percent of their current salary up to £2,500 a month.”

Commenting on the news, Dame Gillian Guy, Chief Executive of Citizens Advice, said: “Extending the furlough scheme and allowing employers to bring back their workers part-time are sensible steps to protect household finances. The Job Retention Scheme was an unprecedented intervention which has protected jobs and put money in people’s pockets.

“We have made clear that changes to the scheme would be needed to make sure people don’t face a financial cliff edge.

“Sadly, we continue to see cases where people in the shielded group are being denied furlough. People in this group need a right to access this scheme if they cannot work safely.

“Nobody should be forced to choose between paying the bills or protecting their health.”

The Coronavirus Job Retention Scheme was announced by Chancellor of the Exchequer Rishi Sunak in March this year.

Mr Sunak said seven and a half million jobs have been furloughed, with nearly one million businesses supported under the scheme.

Employers unable to maintain their current workforce due to coronavirus (COVID-19) can agree with eligible employees to furlough them.

The employers can then apply for a grant that covers 80 percent of their usual monthly wage costs, up to £2,500 a month.

Additionally, the grant covers the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay.

The temporary scheme began from March 1 2020, and was in place for four months, however the Government said it may be extended if necessary.

Reports suggested that Mr Sunak was expected to cut the payments to 60 percent of earnings.

Signalling Mr Sunak’s announcement yesterday, Boris Johnson told MPs: “I have no desire to steal his thunder.

“I think that the furloughing scheme has been one of the most remarkable features of the government’s response.

“It is unlike anything seen internationally, with 6.5 million people currently being supported. It is absolutely right that we should do it.

“One of the most salient and important features of this country’s response to this crisis so far is that we have looked after some of the lowest paid people in our society – the hardest -working people – and we will continue to do so.”

Published at Tue, 12 May 2020 13:20:00 +0000