bbc.com (07.11.2020) As part of the announcement of month-long restrictions in England, including the closure of pubs, restaurants, gyms and non-essential shops, furlough was initially extended until December. But Chancellor Rishi Sunak has now said it will run until the end of March, although the government will review the policy in January.
The furlough scheme was initially extended until December, but now it will run until the end of March, although the government will review the policy in January. The scheme is more generous now. In recent months, firms have had to top up furloughed wages by 20%, with the government paying 60%. Now, the state will put in the full 80%, with the employer only covering pension and National Insurance contributions.
The furlough scheme is being extended until 31 March 2021.
Under the Coronavirus Jobs Retention Scheme, to give furlough its official title, employees placed on leave receive 80% of their pay, up to a maximum of £2,500 a month.
What is happening to the furlough scheme?
Furlough was introduced back in March to prevent mass redundancies.
The scheme subsidises the wages of people who can't do their jobs, either because their workplace is closed, or because there is no longer enough work for them.
About 10 million jobs have already been claimed for, with an estimated two million people still on furlough at the end of October.
The government had resisted repeated calls from unions, business groups and other political parties to extend the scheme. It was due to be replaced by the Job Support Scheme on 1 November.
As part of the announcement of month-long restrictions in England, including the closure of pubs, restaurants, gyms and non-essential shops, furlough was initially extended until December.
But Chancellor Rishi Sunak has now said it will run until the end of March, although the government will review the policy in January.
Will it be any different from the original furlough?
Employees won't notice any difference in their pay packet, but the scheme has become more generous for employers, who will pay less towards it.
In recent months, firms have had to top up furloughed wages by 20%, with the government paying 60%. Now, the state will put in the full 80%, with the employer only covering pension and National Insurance contributions.
Since July, employers have been able to bring back employees part-time, and furlough them for the rest. This will continue.
Who can be furloughed?
Employees can be furloughed regardless of whether they are on full-time, part-time, agency, flexible or zero-hour contracts, but they must have been on the payroll by 30 October 2020. They do not need to have been furloughed before.
They can also take on other jobs while placed on leave, as long as it doesn't breach the rules of their existing contract.
Employees who were employed and on the payroll on 23 September who were made redundant or stopped working afterwards can be re-employed and be claimed for by companies.
While the government updates the system, employers will submit their wage claim to the government, and be refunded afterwards. After that, they will be paid upfront to cover the cost.
By 18 October, furlough claims had cost the taxpayer £41.4bn, with costs expected to rise to about £50bn.
A grant for self-employed workers, covering November to January, is rising from 55% to 80% of trading profits.
Does furlough apply across the UK?
Mr Sunak confirmed the scheme applies throughout the UK, saying the country had "a Treasury for the whole of the United Kingdom".
Scotland and Wales had reacted to the lockdown announcement by saying it was unfair for the full support package to be available only when England is in lockdown.
They said the scheme should be on offer if they went into their own full national lockdowns later on.
Northern Ireland Finance Minister Conor Murphy welcomed the new support but said it was "regrettable" that repeated calls to extend the furlough scheme "had not been answered sooner".