The government has confirmed that the furlough scheme will be extended to the end of March 2021 with 80% of a person’s wage up to £2,500 per month being paid.
Businesses will be expected to cover the cost of NIC and pension for hours not worked equating to around 5% of total employment costs. The scheme will be reviewed again in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.
As part of the revised scheme, anyone made redundant after 23 September can be rehired and put back on furlough.
The planned Job Support Scheme will essentially be replaced by the furlough scheme for the time being.
The Job Retention Bonus –a £1,000 one-off payment to firms that had retained previously furloughed staff until the end of January 2021 – would be scrapped for now and replaced with a new “retention incentive” that would be deployed at an “appropriate time”.
The chancellor also announced billions of pounds of other support for the economy, including more money for self-employed people.
Support through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
At the same time, the chancellor raised guaranteed funding for the UK’s devolved administrations by £2bn to £16bn.