Coronavirus furlough scheme to be extended - but what are the changes and how does it work?
Video report by ITV News Business and Economics Editor Joel Hills
The Government’s scheme to help pay people’s wages and support businesses amid the Covid-19 pandemic is to be extended until the end of October.
The Coronavirus Job Retention scheme currently pays people 80% of their usual earnings until the end of June, capped at £2,500 per month per worker, meaning that they can be furloughed rather than laid off from their place of work as businesses try to cope with the fallout from Covid-19.
In an address to MPs in the Commons, Rishi Sunak promised no matter what changes after July, employees will receive the same level of support as they do now.
What money are you entitled to and how will the initiative work?
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What is furlough?
If you are furloughed then your employer is keeping you on the payroll while a business has less work than normal.
While on furlough you cannot undertake work for or on behalf of your employer.
Many shops, restaurants, hotels and other service industries in the UK have found themselves with no customers after being forced to close amid the pandemic, and many other firms have had work cancelled.
Who is eligible?
Any UK organisation with employees can apply for the Government help as long as they had set up a payroll scheme before March 19, 2020.
This means that people who work for businesses, charities and public authorities will be entitled to the money if their employer signs up.
If you started your job after March 19 then you are not automatically eligible for the scheme.
However, your old employer can 'rehire' you, at their discretion, so that you can access the scene. You will need to have been on your old employer's payroll before the cut off date, according to Money Saving Expert.
If you were made redundant since March 19, you can be put on furlough if your employer rehires you.
How much will I get paid?
Businesses will be able to pay their employees 80% of their regular monthly wage, or £2,500 a month, whichever is lower.
If on the scheme, your employer must pay you at least the 80% of your usual income, however they are also free to top this up if they wish.
This means that if you earn £24,000 a year, you will earn a gross income of at least £1,600 a month on the furlough scheme.
After July employers currently using the scheme will be able to bring furloughed employees back part-time, and the government will ask firms to "start sharing, with the government, the costs of paying people’s salaries".
There had been speculation that the scheme would be extended, but modified to just pay 60% of salaries, but the chancellor confirmed in the Commons this is not the case.
Do I still get taxed?
While on furlough your wage will be subject to the usual income tax and other deductions, the Government guidance says.
Do I need to do anything?
Your employer is responsible for claiming through the Job Retention Scheme on your behalf and for paying you what you are entitled to.
You cannot apply for the scheme yourself.
Both you and your employer must agree to put you on furlough - so speak to your employer about whether they can claim.
Once agreed your employer must confirm in writing that you have been furloughed to be eligible to claim.
Contact your employer if you do not receive confirmation.
If you are concerned that your employer has not claimed on your behalf, you should speak to your employer.
HMRC will not be able to provide information about individual applications.
How long will it last?
The Coronavirus Job Retention Scheme was originally intended to run to June 1, 2020, however it has been extended until at least the end of that month.
In a statement, Chancellor Rishi Sunak said: “Our unprecedented job retention scheme will protect millions of jobs across the country and is now up and running.
“It’s vital that our economy gets up and running again as soon as it’s safe – and this scheme will allow that to happen.”
How have businesses and trade unions reacted?
The two groups have broadly welcomed the scheme and its extension.
Trade bodies and business groups said the Government must ensure speedy access to the funds so staff can be paid.
Unions said there would be “no reason” for redundancies and called on ministers to ensure workers are protected longer-term during a recovery.
'Of course, we're not going to be able to save every business and every job'
The furloughing scheme is just one of a number of "unprecedented measures", said Culture Secretary Oliver Dowden.
He admitted that the Government won't be able to save every business.
Who will run the scheme?
The Treasury said in a statement that about 5,000 HMRC staff will work on the project, which is intended to assist thousands of UK firms, with the money due to reach bank accounts within six working days.
Phone lines and web-chat services will be available to help answer applicants’ questions, with the scheme launching 10 days ahead of schedule, it added.
What are my rights?
According to HM Revenue and Customs (HMRC) furloughed employees have exactly the same rights they did when working.
This means you are still entitled to statutory sick pay, maternity and other parental rights, the right against unfair dismissal and redundancy payments should you lose your job.
What if I do not want to go on furlough?
The Government say you may be at risk of losing your job if your employer asks you to go on furlough and you refuse.
If this is the case, it must be in line with normal redundancy rules and protections.
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