Sunak revealed the introduction of a more flexible furlough regime during the government’s daily coronavirus press briefing in London.
Although, firms will have to start making a financial contribution to the cost of furloughing workers from the start of August.
In a move that will bring relief to self-employed homeworkers, Sunak also announced the Self-Employment Income Support Scheme (SEISS) would be extended for another three months with a payment of up to £6,570 to paid to self-employed workers in August.
The scheme had been due to end on 1 June with worries that the government might opt not to extend it.
The Treasury’s changes to the Coronavirus Job Retention Scheme mean travel firms can start bringing back furloughed staff part-time from 1 July with companies able to decide the hours and shifts they work - the government will still pay 80% of their normal salary when they are not working.
The government will then gradually “taper” the scheme from August with employers having to pay a “modest share” to furloughed staff.
Initially, firms will just have to pay employers’ national insurance and pension contributions in August, and then further contribute 10% of wages in September and 20% of wages in October for furloughed employees.
Sunak called the furlough and self-employed schemes a “lifeline for millions of people and businesses” during the Covid-19 crisis.
“Our top priority has always been to support people, protect jobs and businesses through this crisis. The furlough and self-employment schemes have been a lifeline for millions of people and businesses,” said Sunak.
“We stood behind Britain’s businesses and workers as we came into this crisis and we stand behind them as we come through the other side.
“Now, as we begin to reopen our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining among the most generous in the world.”
