THE FURLOUGH scheme is to be extended and workers will get up to 80% of wages paid for hours they don’t work during the second national lockdown.
The scheme, which was due to finish yesterday, will be extended for the duration of tougher national measures as the Government attempt to curb the spread of coronavirus.
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When does the new furlough scheme extension end?
The furlough scheme was due to come to an end on October 31, with the new Job Support Scheme to run for six months from the start of November, to the end of April next year.
But during Boris Johnson’s speech on Saturday night (October 31, 2020), he announced the furlough scheme would be extended and Job Support Scheme would be put on hold.
Details about how the furlough extension will work are expected to be released in the coming days.
When the Chancellor Rishi Sunak first announced government support for jobs on March 20, he said it would only last until May 31.
How has the furlough scheme changed and what happens next?
The furlough scheme is being extended.
It means employees for businesses due to the lockdown will get up to 80% of wages paid for hours not worked, up to a maximum of £2,500.
The Job Support Scheme, which was due to start today, has been postponed until the furlough scheme ends.
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What is happening to the Job Support Scheme?
The new Job Support Scheme, which aims to continue to support businesses and their employees facing coronavirus-related woes, comes into effect when lockdown finishes in December.
The Job Support Scheme was due to start on November 1, and run for six months until April 30, 2021 – though the government has said it will review it in January.
When the Chancellor Rishi Sunak first announced government support for jobs on March 20, he said it would only last until May 31.
The new Job Support Scheme was announced by Chancellor Rishi Sunak earlier in October.
The Chancellor hopes the JSS extension will reduce the millions of job losses expected when furlough ends.
Under the JSS, employees could work one day a week and earn up to 73% of their wages under the changes.
It’s designed to help employees working for businesses that have shut down in areas put under Tier 2 and Tier 3 lockdown restrictions.
Employees on the scheme would have needed to have worked a minimum of 33% of their hours to be eligible, and businesses must contribute a third of wages.
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Who is eligible for Furlough Extension?
Businesses will be allowed to bring back furloughed employees on a part-time basis – but they must have been on payroll before October 30.
Companies will only have to pay National Insurance or employer pension contributions.
Mortgage holidays will also be extended to help reassure homeowners.
Businesses closed due to new rules will also get grants of up to £3,000 per month.
Workers can ask previous employers to rehire and furlough them, even if they left for another job, but firms don’t have to do this.
To access the scheme, your employer must comply with the following:
- Designate employees who cannot do their jobs due to the coronavirus measures put in place by the government
- Notify those employees of their new “furloughed” status
- Submit information to HMRC about furloughed employees to set up a system for reimbursement and about existing systems that will facilitate payments
Grants for self-employed workers will also double to cover 40% of previous earnings, up to £3,750, and new grants for businesses in high alert areas.
It will be the second major amendment the Chancellor has made to the JSS since is was announced last month.
Who is eligible?
Any UK organisation with employees can apply to furlough their workers, including businesses, charities, recruitment agencies and public authorities.
All employers with UK bank accounts and UK PAYE schemes can claim the grant. They don’t need to have use the furlough scheme to apply.
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Large companies (with more than 250 employees) have to meet a financial impact test. It means the scheme is only available to those whose turnover has stayed the same or is lower than before Covid-19.
There is no financial impact test for SMEs or charities.
Staff on any contract are eligible, even those on zero hours or agency workers.
