Furlough Job Retention Scheme Extended to End of October

Written by: Keith Tully


mask on tubeThe government’s job retention scheme will continue to cover the costs of wages for furloughed workers until the end of October, the chancellor has announced.

Support for furloughed workers and their employers will be extended into the autumn months with 80 per cent of wages up to £2,500 being covered by the Treasury-backed scheme.

“There will be no reduction in the level of support for those on the scheme,” said chancellor of the exchequer Rishi Sunak in a statement to the House of Commons.

It had been thought and widely reported that the chancellor was planning to scale back the furlough scheme such that it meant only 60 per cent of wages would be covered from July.

However, Mr Sunak has now made clear that the government intends to see a full four fifths of the wages of millions of currently furloughed employees continue to be covered up to £2,500 a month.

The chancellor said there will be no changes to the existing scheme until the end of July, after which point a greater degree of flexibility will be incorporated into the process and employers will be expected to make contributions to their staff’s salaries.  

Mr Sunak said that roughly 7.5 million jobs and over a million businesses have so far been supported by the job retention initiative, which came into effect following the nationwide lockdown and the introduction of emergency measures relating to the coronavirus crisis.

The job retention scheme currently stipulates that employees do not do any work at all for their employers while being furloughed but the option of having people work on a part-time basis while still being partially furloughed is set to be incorporated into the scheme’s revised structure from August onwards.

Frances O’Grady, general secretary of the Trades Union Congress (TUC), welcomed the chancellor’s latest announcements on the government’s plans for the furlough scheme, saying, “this will be a big relief for millions”.

“We are pleased ministers have listened to unions and extended the job retention scheme to the autumn,” she said.

“Changing the rules to allow part-time working is key to enabling a gradual and safe return to work. And maintaining the rate at 80 per cent is a win for the pay packets of working families.”

Keith Tully

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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