Government Announces Furlough Applications Close On 30 June

Marco Green
May 29, 2020

A group of over 100 MPs have asked Chancellor Rishi Sunak to extend the self-employment income support scheme, which is due to end this weekend.

Under plans to be announced by Rishi Sunak over the next few days, the support given by the furlough scheme will be cut back due to government concerns about its spiralling cost and the likely impact on the UK's growing public spending deficit.

However, Sunak has said that after August employers would be expected to pay a contribution towards continued costs with a draft proposal for businesses to start paying 20%, reducing the government contribution to 60% per full and part-time worker.

Meanwhile, self-employed people who are eligible can apply for a second grant to help ease financial pressure during the coronavirus pandemic, before going on to lay out the future plans for the furlough scheme.

As before, a single grant - this time at a reduced level of £6,570 - will be paid to self-employed workers covering a three-month period.

Some employers had warned that they would not be able to pay 20% of the wage costs of their furloughed staff as soon as August - as reported by media before Friday's announcement - raising the risk of a fresh surge in job losses.

Employees in the scheme are now receiving 80% of their normal pay capped at £2,500 a month, with employers fully compensated for pay, employer national insurance contributions and pension contributions.

Employers will also be expected to pay national insurance contributions, which they are now exempt from, and employer pension contributions.

In September, the government will pay 70 percent of wages up to a cap of £2,190.

Employers have furloughed 8.4 million workers and claimed up to 80% of their wages, to a maximum £2,500 a month.

"Our top priority has always been to support people, protect jobs and businesses through this crisis", he said.

A quarter of businesses using the United Kingdom government's coronavirus Job Retention Scheme said they would struggle to contribute to furloughed workers' salaries from August, according to the Institute of Directors (IoD).

"Now, as we begin to re-open our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world".

Other reports by Click Lancashire

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