The changes have been widely expected and will see the UK gradually weaned off the furlough scheme.
Chancellor of The Exchequer Rishi Sunak has confirmed changes to the Job Retention Scheme which has allowed firms to furlough staff during the COVID-19 crisis.
Sunak said that the scheme would now require increased employer contributions from August which will increase gradually until the scheme closes in October.
He also confirmed that the self-employed income scheme will be extended with a final grant - this, as with the previous one, will be taken from a three-month average.
However, he said there will be no changes or further extensions to this scheme.
He said: "A wide range of support - discounted loans, tax cuts and mortgage holidays - has been provided. Now our resources must be turned to looking forward, he says.
"Not everything will look the same as before.
"We won't be able to put the key into the lock and step into the world as it was in January, The government will do what it can to help people thrive in the post-COVID world."
Changes to the furlough scheme will see a new flexible furlough introduced which will allow people to work part-time.
This will come in from July 1, rather than August 1 as planned with firms only paying for the days worked.
In terms of costs businesses will be asked to pay National Insurance and pensions contributions in August before a gradual pullback from subsidies.
That pullback will see employers pay 10% of salaries from September and 20% from October.
Any new employees will have to be added scheme by June 10.
