Following the Chancellor’s announcement that the Furlough Scheme and Self Employed Income Support Scheme (SEISS) are to be extended, the Government has now released further details of how these schemes will work.
New Furlough Scheme
The new scheme commences on 1st July and only previously furloughed employees will be eligible.
There is enhanced flexibility with employees being able to return to work on a part-time basis and then furloughed for the hours that they are not working. The part-time working arrangements will need to be agreed in writing.
However, an employer cannot claim for more furloughed employees than the maximum number claimed for under any previous claim period. Also, employees cannot go on to part-time furlough unless they have had a minimum of a consecutive three week period of furlough between 1st March and 30th June.
The Government is reducing the contribution it is making to the Furlough Scheme from 1st August and employers will be required to contribute to the furlough costs as set out in the table below. The employee still receives a minimum of 80% and the employer can top this up if they wish.
|Month||Government Contribution||Employers Contribution|
|June||80% (Max £2,500.00)|
+ NI + Pens
|July||80% (Max £2,500.00)|
+ NI + Pens
|August||80% (Max £2,500.00)||NI + Pens|
|September||70% (Max £2,187.50)||10% (Max £312.50) + NI + Pens|
|October||60% (Max £1,875.00)||20% (Max £625.00) + NI + Pens|
The new caps will be proportional to the hours not worked, so if an employee works 75% of their normal working week then the cap is set at 25% of the amount shown.
This week it has also been confirmed that employers who have employees on maternity, adoption or other parental leave and are due to return to work in the next few months will still be able to furlough them even if they have not had a previous furlough period. This means those employers and employees are not at a disadvantage.
Next Step for Employers:
- Review HR strategy in the next week in line with the latest guidance and our HR team can talk you through your options and advise on the best solution for you;
- Consider any other options including phased returns to work, reduction in working hours, linking staff contracts to performance of business, short-time working or redundancies. Do not leave these conversations until later this year as staff will be less responsive. Discuss with our HR team how to have these conversations now.
- You have until 31st July to make any claims in respect of the period up to 30th June and thereafter you will be unable to claim for that period of the scheme.
The Chancellor has also confirmed the details of phase two of the SEISS which will cover June, July and August.
- If you qualified to claim under phase one of SEISS then you can make a claim in August under phase two provided that your business is adversely affected on or after 14th July;
- The payment under phase two will be paid at the rate of 70% of average monthly profits for 3 months and capped at £6,750;
- You do not need to have made a claim under phase one to be able to make a claim under phase two;
- If you have not made a claim under phase one but could have done, then you can make claim before 13th July for phase two, which is paid at 80% of average monthly profits for three months capped at £7,500.
You can check if you are eligible to make a claim and make a claim here on the Government website.
If you haven’t already we would encourage you to speak to our Head of HR Wendy McGarvey. Her team of HR experts can assist you with a discounted HR support package that will cover everything you need during this period including return-to-work advice and staff template letters that comply with the latest guidance, as well as restructuring and redundancy support.