The government revealed more details on the previously announced changes to the Coronavirus Job Retention Scheme on Friday (29 May).
From 1 July – a month earlier than previously announced – businesses will be able to bring back furloughed workers on a part-time basis. Employers will be able to decide when and what hours their employees work, but they will be responsible for paying their wages for the time they are working. Any new working hours agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing, meaning new agreements will have to be drafted. Further guidance on how flexible furloughing will work will be published on 12 June.
From August, employers will also start to pay a proportion of the cost of furloughing their workers. While employees will continue to receive the 80% of their salary under the scheme (to a maximum cap of £2,500), the amount the government pays will taper off over three months as follows:
- August – The government will pay 80% of wages up to a cap of £2,500. Employers will pay NICs and pension contributions.
- September – The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay 10% of wages up to the monthly cap of £2,500, plus NICs and pension contributions.
- October – The government will pay 60% of wages up to a cap of £1,875. Employers will pay 20% of wages up to the monthly cap of £2,500, plus NICs and pension contributions.
The Job Retention Scheme will close to new entrants from 30 June – after this point, employers will only be able to claim for employees they have previously furloughed for a full three-week period that ended prior to 30 June.
The Self-employed Income Support Scheme
The Chancellor also announced that the Self-employed Income Support Scheme will also be extended for another three-month period. This second grant is payable at a reduced rate of 70% of a self-employed individual’s average monthly trading profits. This amount will be paid in a single instalment, capped at £6,570 for the three-month period, and like the first grant will be taxable. The eligibility criteria also remain the same – individuals will need to confirm that their business has been adversely affected by coronavirus as part of the claim process.
Applications for the second grant will open in August, and there is no need for someone to have claimed the first instalment of the grant – for example, if they had not been affected by coronavirus in the first grant period but have been in this second period. The application period for the first grant will remain open until 13 July.
Both schemes will finish at the end of October, and the Chancellor has said that there will be no further extensions to the schemes.