” The furlough scheme was about to end and to be replaced by the Job Support Scheme but with a few hours to go the Government have extended it for one month.
80% of wages will be continued to be paid by the Government.
This is a dramatic about turn.”Nigel Holland
Covid: Who can go back on to furlough?
Hours before the furlough scheme was due to end, the government announced it will be extended until December, as it brings in a further lockdown in England.
The initiative, which has paid up to 80% of the wages of millions of people unable to work due to the effects of coronavirus pandemic, was due to be replaced by the less generous Job Support Scheme (JSS) on 1 November.
Under the Coronavirus Jobs Retention Scheme, to give furlough its official title, employees placed on leave received 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 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.
But as part of the announcement of month-long restrictions in England, including the closure of pubs, restaurants, gyms and non-essential shops, the government said the furlough scheme would be extended until December.
Prime Minister Boris Johnson said he was ”under no illusions” as to how difficult the new lockdown would be for businesses that had already faced so much hardship this year.
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.
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.
To be eligible for this extension, employees must have been on the payroll by 30 October 2020, but they don’t need to have been furloughed before.
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.