New Furlough Extension

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On Thursday, 17 December, Chancellor Rishi Sunak announced that the Coronavirus Job Retention Scheme (CJRS), often referred to as the furlough scheme, would be extended once again, this time until the end of April 2021

This follows extensions that took place in April, May and October of this year.

Have the conditions changed?

No. To put it simply.

The conditions under the latest furlough extension are exactly the same as those that were implemented back in October.

This means that the Government contribution of 80% of a furloughed employees' wages, up to a cap of £2,500 per month, as well as employer National Insurance (NI) and pension contributions, will continue for an extra month.

Employers will remain responsible for all NI and pension contributions for their furloughed employees.

Timeline of the furlough scheme

March 2020

CJRS launched on 20 March and backdated to 1 March. Government contributions begin at 80% of a furloughed employees' wage, capped at £2,500 per month. Government contributions include employer National Insurance (NI) and pension contributions. The CJRS is initially planned to last just four months—March to June.

April 2020

Following the extension of a country-wide lockdown, the CJRS is extended until the end of June.

May 2020

On 12 May, the Government announces that the CJRS will be extended until the end of October; however, it is also announced that the Government contributions will decrease month-on-month from August. Finally, it is confirmed that companies will be unable to furlough an employee for the first time beyond 10 June.

July 2020

Flexible furloughing is introduced from the start of July. Furloughed employees are allowed to return to work on a part-time basis; however, employers become responsible for paying the entirety of an employee's wage for the hours they work. The Government contribution remains at 80% for all unworked hours.

August 2020
Employers are required to begin paying NI and pension contributions for furloughed employees. The Government continues to pay 80% of a furloughed employee's wage.

September 2020

The Government's wage contribution is reduced to 70% and employers have to pay 10% of their furloughed employees' wage to meet the minimum 80% mark.

October 2020

The wage contribution is reduced again, this time to 60%. Employers must now contribute a minimum of 20% of furloughed employees' wages.

31 October 2020

On 31 October, the day the CJRS was due to end, Prime Minister Boris Johnson announces that it will be extended until December. The Government contribution returns to 80% (capped at £2,500 per month); however, employers remain responsible for NI and pension contributions. It is also announced that employees, for the first time since mid-June, can be furloughed for the first time.

5 November 2020

Chancellor Rishi Sunak announces that the furlough scheme will be extended until the end of March.

17 December 2020

Chancellor Rishi Sunak announces that the furlough scheme will be extended for a further month until the end of April 2021.

Latest furlough conditions

Concerned that your furlough calculations are not right? Fret not. PayFit's automated payroll software is here to help.

Book a demo with one of our product specialists to find out more.

PayFit blog author

PayFit blog author

PayFit

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