At the Prime Minister Boris Johnsons live announcement on Saturday 31st October he revealed that the furlough scheme that was originally introduced in March would be extended for a further month following the news that England would enter into a second national lockdown. Since that announcement we have been waiting for more details on what will happen next, the Chancellor Rishi Sunak has now confirmed that the furlough scheme will be extended until March 2021.
The news has been welcomed by both employers and employees alike. Employers can use the furlough scheme and keep their staff while employees can breathe a slight sigh of relief now knowing that they will continue to receive an income until March next year and perhaps more importantly will have a chance to return to work.
From the update given by Rishi Sunak there seems to be two important and clear updates:
- Some staff who have been made redundant can be re-employed and placed on furlough
- The extended furlough scheme applies to all the UK
With this announcement coming so late in the day, unfortunately employers had already started to make plans for furlough ending with some having already paid off members of staff. However, the Chancellor has revealed that any employee who had been made redundant but was still on the payroll on 23rd September 2020 can be re-employed and placed on furlough. The government are aware that this will not save every person who has unfortunately lost their job, but the hope is that it will at least help some of the people who have been affected. Before today it was unknown if furlough would be extended across the full of the UK or if it would only take effect in England where the second lockdown is now under way. The Chancellor has confirmed that the extended scheme would apply to all the UK, saying “the furlough scheme was designed and delivered by the government of the United Kingdom on behalf of all the people of the United Kingdom where ever they live. That has been the case since March, it is the case now and will remain the case until next March”.
Following that update from Rishi Sunak we also know:
- The scheme will pay up to 80% of a person's wage up to £2,500 a month
- The government will review the policy again in January where it could be the case that employers are asked to contribute to employees’ wages
- Employers can use the furlough scheme even if they or any relevant employee hasn’t done so before now
- Employees who have previously been furloughed will use the same reference for pay and hours to simplify administration
- Employees can be placed on furlough if they are shielding (or need to stay at home with someone who is shielding)
- The job retention bonus that was to be paid in January will no longer be paid and a retention incentive will be redeployed at another time
What does this mean for the Job Support Scheme?
The Job Support Scheme that was introduced in September and was supposed to start on the 1st November was due to replace furlough however with the news that furlough is being extended the Job support scheme is at present no longer needed and for now has been postponed.