02 Oct 2020

End of the furlough scheme – What next?

The Government’s furlough scheme, which helped support businesses and protect jobs through the coronavirus pandemic, closes at the end of this month (October, 2020).

The scheme helped prevent mass lay-offs by paying a proportion of employees’ wages and other contributions while they were not required in their jobs due to reduced business.

Last week Chancellor Rishi Sunak announced the scheme would be replaced by the Job Support Scheme, which opens on November 1, 2020, and runs for six months.

Under the scheme, the business will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.

The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.

Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

Since the announcement, the Government has published this document to explain the scheme.