Furlough scheme end: When will changes to furlough scheme start?

Rishi Sunak shuts down SNP’s ‘noble’ jibe in House of Commons

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The Coronavirus Job Retention Scheme (CJRS) has been one of the Government’s defining fiscal policies during the COVID-19 pandemic. CJRS has been commonly known as the furlough scheme since it began last year. Millions have had their wages paid by the Government in recent months, as businesses have suffered significant disruption due to coronavirus.

With the scheme first introduced in March 2020, the furlough scheme has now been in place for more than a year.

Whereas previously employees could not work at all while on furlough, the scheme has become more flexible in recent months.

Employers are now able to furlough an employee for any amount of time and for any work pattern.

During April and May, the Government will pay 80 percent of wages for hours not worked, subject to a cap of £2,500.

When will the furlough scheme end?

The furlough scheme was extended by the Chancellor in the March Budget this year.

Speaking ahead of the Budget, Rishi Sunak said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.

“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead – and beyond.”

The furlough scheme will now run until the end of September 2021.

However, Government support will start to decrease over the coming months.

The furlough scheme has previously been extended before due to the lockdown situation in the UK.

However, it is not currently clear whether the Government will extend the scheme again past September 2021.

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When will changes to furlough scheme start?

Major changes to the furlough scheme are due to come into place from July 1, 2021.

From this date, the amount the Government will pay for an employee’s wages will start to taper off.

Until the furlough scheme ends in September, employers will be required to pay employees up to 80 percent of their wages for hours not worked, capped at £2,500 per month.

But the Government will only pay 70 percent of wages for hours not worked, capped at £2,187.50 per month, for the month of July.

In August and September, the Government contribution for hours not worked will decrease to 60 percent, capped at £1,875 per month.

This means the employer will be required to top up wages to 80 percent.

Throughout May to September, employers will be required to pay the usual National Insurance and pension contributions for their employees.

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