The Chancellor has provided more details of the extension of the CJRS to the end of October. The key points are:
Payments to employees under the CJRS will continue until the end of 31 October 2020 at the 80% earnings level, subject to a £2,500 a month maximum. However, the scheme will close to new entrants from 30 June. From then on, employers will only be able to furlough employees that they have already furloughed for a full three-week period before 30 June.
Currently a furloughed employee cannot do any work for their employer or associated organisation. From 1 July, a month earlier than previously announced, this absolute requirement will be relaxed to allow employers to bring back furloughed employees on a part time basis. The furlough scheme will then cover only the hours for which the employee is not working, with the employer meeting full payment for the hours worked.
Government involvement in meeting furlough costs is to be phased down on the following timeline:
- For June and July the government will continue to meet the full cost of 80% earnings (maximum £2,500) plus associated employer National Insurance (NI) and employer automatic enrolment pension contributions.
- In August the government will meet the cost of 80% earnings (maximum £2,500), but the employer will be responsible for NI and pension contributions.
- In September the government will meet the cost of 70% earnings, with the employer responsible for covering the other 10% of earnings as well as NI and pension contributions.
- In October the government will meet the cost of 60% earnings, with the employer responsible for covering the other 20% of earnings as well as NI and pension contributions.