Furlough was introduced in spring 2020, to stop people being laid off by their employers during lockdown.
The government paid 80% of the wages of people who couldn't work, or whose employers could no longer afford to pay them - up to a monthly limit of £2,500. This is now changing:
The monthly limit of £2,500 will stay in place, so workers will not notice the difference.
But by making furlough more expensive for employers, the government hopes to encourage them to take workers back full-time if they can. Employers already have to pay pension and National Insurance contributions.
The government says 11.6 million jobs have been supported since the scheme began.
From March 2020 to the end of September 2021, the cost of furlough will come to about £66bn, according to estimates from the Office for Budget Responsibility.
However, the scheme has undoubtedly helped to save millions of jobs.
At the start of the pandemic it was feared that more than one in 10 workers would become unemployed.
Instead the unemployment rate is currently less than one in 20.
Furlough has been extended four times already, causing much confusion. One of the reasons it was extended to 30 September - long past the expected end of lockdown - was to give businesses certainty and prevent the need for yet another extension.
Boris Johnson and Chancellor Rishi Sunak both said recently that they do not want to extend furlough again. "On the basis of what we can see now in the data... we don't think we'll need to change," the Prime Minister recently said.
But if the data changes, and a large new wave of infections leads to further restrictions, the government will come under a lot of pressure to reconsider.
Further details about furlough and the changes to the CJRS can be found on the Government website.
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Charlotte & The Business Hut Team