Rishi Sunak announces employers must pay some furlough costs for staff from August
29 May 2020, 17:34 | Updated: 29 May 2020, 17:57
The Chancellor has announced changes to the furlough scheme in the UK.
Rishi Sunak today announced changes to the government furlough scheme, revealing that employers will be asked to gradually contribute from August.
The government will continue to pay 80 per cent of furloughed staffs' wages (capped at £2,500) until the end of August, and it will then be cut to 70 per cent in September and 60 per cent in October.
Employers have been asked to make up the extra 10 per cent and 20 per cent in those months respectively. They have also been told they will need to pay national insurance and employer pension contributions from August, which will amount to around five per cent.
Speaking at the daily press conference today, the Chancellor said: "I have decided to ask employers to pay only a modest contribution introduced slowly over the coming months.
"In June and July, the scheme will continue as before with no employer contribution at all.
"In August, the tax payers' contribution to peoples wages will stay at 80 per cent. Employers will only be asked to pay national insurance, and employer pension contributions, which, for the average claim, account for just 5 per cent of total employment costs.
"By September, employers will have had the opportunity to make any necessary changes to their workplaces and business practices. Only then - in the final two months of this eight month scheme - will we ask employers to start paying towards people's wages.
"In September, taxpayers will pay 70 per cent of the furlough grant, with employers contributing 10 per cent. In October, taxpayers will pay 60 per cent, with employers contributing 20 per cent.
Around 8.4 million workers have been furloughed under the scheme, which was first announced on 20 March, and it has cost the government around £15bn.
The scheme was originally intended to finish on 31 May, but it was extended until the end of June on 17 April. It was then extended until October earlier this month.