How the furlough scheme will be phased out, revealed by Chancellor Rishi Sunak
18:17, 29 May 2020
updated: 18:19, 29 May 2020
Employers must start paying towards the wages of furloughed staff from August when plans to phase out the scheme kick in, the Chancellor has confirmed.
In October, businesses with staff still on furlough will have to pay 20% of their wages.
KMTV spoke with Andrew Tate from accountancy firm Kreston Reeves about the phasing-out plans
Rishi Sunak hopes to phase out the job retention scheme in the autumn - with no one being added to furlough claims after June.
Mr Sunak also told businesses they will be able to bring furloughed staff back to full-time work from July 1 - one month earlier than originally planned.
The Chancellor warned the furlough scheme "cannot continue indefinitely" and confirmed that in August, employers will pay staff's national insurance and employer pension contributions.
Then in September, employers will contribute 10% of wages, while in October it will rise to 20%.
Mr Sunak said despite "extraordinary" furlough intervention to protect as many jobs as possible, not every job has or will be saved.
He stressed how the government will "work hard" to help get people back into work if they do lose their jobs.
The Chancellor also announced a "new flexible furlough" which will allow people to work part-time while still on furlough.
This means employers will have the "maximum possibility flexibility" to decide what is right for them.
Bosses will pay for any days worked, while the government will contribute for the days staff are not at work.
Today's press briefing also revealed that self-employed workers will be eligible for a second and final coronavirus grant.
The Self-Employment Income Support Scheme was due to expire this Sunday, however, pressure from more than 100 MPs has sparked the government into a rethink.
The support package has so far seen 2.3 million claims worth £6.8 billion.
Labour's shadow Chancellor has welcomed today's news, she said: “It is welcome that the government has heeded Labour’s calls for a more gradual introduction of the employer contribution to furlough, the introduction of flexibility within furlough to allow part time working, and the extension of the self-employed scheme."
