An update to the Furlough scheme in September

What is Furlough?

The furlough scheme was established by the government, in wake of the Coronavirus pandemic, to prevent mass redundancies across the country.

Under the Coronavirus Job Retention Scheme (CJRS), employers were able to place employees on temporary leave, with the government paying 80% of their monthly wage, up to £2,500. The employer had the option to ‘top-up’ the remaining 20%.

How has the Coronavirus Job Retention Scheme changed?

The eligibility cut-off date for CJRS was 19 March 2020 and employers were able to claim a grant covering 80% of the wages for a furloughed employee, subject to a cap of £2,500 a month.

Since July 2020, furloughed workers have been able to return to work on a part-time basis, with the company paying for their time working and the government making up the remainder.

From 1 August 2020, companies began paying employer’s pension and national insurance contributions.

From 1 September 2020, the government’s contribution reduces to 70% (from 80% previously). Employers will now have a compulsory 10% payment to make (taking it up to 80%), with the continued voluntary 20%.

From 1 October 2020, the government will be reducing their payment to 60% of furloughed employees’ wages, up to a maximum of £1,875. Employers will be expected to make up the remaining 20% (taking it up to 80%), with the continued voluntary 20%.

The CJRS will close on 31 October, with the chance of any further extension being ruled out.

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