Changes announced to Government income protection schemes

Rishi Sunak announces plans to extend the income protection scheme for the self-employed until August and to taper the furlough scheme and introduce some flexibility.

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The Government has announced an extension of the Self-Employment Income Support Scheme (SEISS) and the tapering of its furlough scheme for employed workers.

Chancellor Rishi Sunak says that in June and July, the furlough scheme will continue as before – with the Government paying 80% of wages up to  a cap of £2,500 – with no employer contribution.

In August, that will continue, but employers will be asked to pay national insurance and employer pension contributions. By September, employers will be asked to pay 10% of wages and the Government will pay 70%. In October, employers will pay 20% and the Government 60%. The scheme will close after October.

Sunak also announced plans for a flexible furlough scheme as of 1st July [“with no central definition of part-time hours”] under which employers can bring people back part time, on a few days a week with the Government topping up the rest of their wages.

In order to do so, Sunak said the furlough scheme would close to new joiners as of 30th June. Employers wanting to place new employees on the scheme will need to do so by June 10th, to allow time to complete the minimum furlough period before then.

The Government has said that in August self-employed people eligible for SEISS will be able to claim 70 per cent of their average trading profits (up to £6,570) for the months June, July and August.

IPSE (the Association of Independent Professionals and the Self-Employed) has welcomed the announcement, but warned that the government has “patently forgotten” groups like limited company directors and the newly self-employed and urged it to do more for them.

Andy Chamberlain, Director of Policy at IPSE, said: “It will be an overwhelming relief for many self-employed people that the government has heeded our calls and extended SEISS. The scheme is a vital lifeline for millions of people and it is absolutely right that the Government keeps it running.

“It is fair that, as with the Job Retention Scheme, the Government has tapered the support on offer for the self-employed. However, it is disappointing that there will still be two months when employees can access support and the self-employed cannot. The Government should watch the situation carefully and be ready to step in if the UK’s self-employed need more support.

He added: “It is also vital that the Government does not ignore the self-employed who cannot access this scheme. At the moment, groups like freelancers working through limited companies and the newly self-employed have patently been forgotten. We urge the Government to consider these groups and also help them through the coming months.”


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