Coronavirus: Government to cover national insurance and pension contributions for furloughed workers

Support worth up to £300 a month follows offer to pay up to 80 per cent of wages

Chancellor Rishi Sunak has extended the government’s coronavirus job retention scheme by offering to pay employer national insurance and pension contributions up to a maximum of £300 a month for each member of staff.

The move comes on top of the Treasury’s offer to pay up to 80 per cent of the wages – up to £2,500 a month – of employees who might otherwise be laid off.

It follows concerns that some employers would still make staff redundant during the crisis because of the remaining costs of keeping them on the books, even after the bulk of their wage bill is paid by the state.

The additional offer for “furloughed” staff will add to the cost of a scheme which was already estimated to cost £10bn over three months even if only 10 per cent of those eligible take advantage of it.

Under the scheme, the government will now cover the employer national insurance and minimum auto-enrolment pension scheme contributions employers pay on the wages they must pay their furloughed staff – on top of the wages covered under the scheme.

Mr Sunak said: “Since the start of the coronavirus outbreak, I’ve made it clear that hard-working employers and employees should not have to suffer hardship unnecessarily.

“Our coronavirus job retention scheme supports workers and businesses up and down the UK – and today we’re strengthening it because we will do whatever it takes to support jobs.”

New government guidance also makes clear that anyone made redundant after 28 February can be re-employed and placed on furlough.

And those on furlough will also be permitted to volunteer without risking their pay – including by joining the 700,000-plus members of the public who have responded to an appeal for volunteers to help the NHS.

A number of major employers said they would be taking advantage of the scheme.

Pano Christou, chief executive of Pret A Manger, said: “We had already made a commitment to keep jobs across Pret for as long as possible, but thanks to the government’s support can also keep paying all 8,000 UK employees, despite the fact that our UK shops are not currently open.”

James Watt, the co-founder of BrewDog, said: “This has allowed us to keep doing our best to ensure our business survives and we protect as many jobs as we can.”

And James Timpson, chief executive of key-cutting chain Timpson Group, said: “The support that the government has given to business is vital to keep people employed, and to ensure we can plan our futures with more certainty.

“The package of support given makes our future secure and our colleagues and suppliers can sleep well at night now.”