It’s hard to keep up with furlough. Hours before the financial support scheme was due to wrap up once and for all at the end of October, the government announced it would be extended until December – as part of the new month-long lockdown restrictions in England.
Now, chancellor Rishi Sunak has confirmed a second extension. The furlough scheme will run until the end of March for any businesses affected by local or national lockdowns.
The additional financial support is on a par with the original scheme that first began in March, which paid 80% of the wages up to a maximum of £2,500 a month, winding down to 60% as the economy began to reopen this summer.
Speaking in the house of commons on Thursday, Sunak defended the repeated U-turns on financial support. “In the face of such an unprecedented crisis, the government must be flexible to ever-changing circumstances,” he said.
“It is not a weakness to be agile and fast-moving in the face of a crisis, but rather a strength and that will not change.”
However, many people are worried that due to the the eleventh-hour nature of the lockdown and both furlough announcements, it may be too late for businesses to retract redundancies made in anticipation of the original furlough coming to an end. Here’s what you need to know if this situation affects you.
What is happening to the furlough scheme?
The extended furlough scheme will turn the clocks back to how things were during the first lockdown. Employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 and employers will have to pay employer National Insurance contributions and pension contributions.
Flexi-furlough will continue to be an option, so employees can work part-time and receive a furlough grant for unworked hours.
So far, about 10 million jobs have been claimed for and an estimated two million workers were still on furlough at the end of October. Around half of these are in the hospitality, arts and recreation, administrative, and aviation industries.
The extension of furlough will be UK-wide, covering Scotland, Northern Ireland, and Wales. This follows devolved nations calling for the measure to support their own tightened restrictions weeks ago.
Who can go back on furlough?
To be eligible for the furlough extension, employees need to have been on an employer’s payroll on September 23 (and already furloughed), even if they were then made redundant afterwards in October.
This has brought the latest furlough extension in line with the original scheme that allowed employers to re-hire employees who had been made redundant.
“Many furloughed employees were made redundant at the end of October on the assumption that the furlough scheme was ending on that date,” Lucy Lewis, partner at commercial law firm Lewis Silkin previously told HuffPost UK – before this new extension.
“What I think we will see over this month is a lot of pressure on the government to catch a significant group of people who are going to fall through the holes between the two schemes,” she added. “There is a really big gap and it’s inevitable that there will be redundancies.”
What if I’ve already lost my job?
If you were made redundant before the end of October, it’s worth getting in touch with your employer as soon as possible. “Businesses will have the flexibility to bring furloughed employees back to work on a part-time basis or furlough them full-time,” explains Matthew Bradbury from Citizens Advice.
There are no guarantees. “Even if re-hiring is allowed, employers will not be under any obligation to re-hire and should take legal advice before doing so,” Lucy Lewis told HuffPost UK at the start of November.
“There’s a big barrier financial, administrative barrier and people will fall through the gaps in terms of employment changes and I think is inevitable.”
But there is help out there, says Bradbury: “If you’re struggling financially, contact your local Citizens Advice who can provide you with advice and support, including on what help might be available if you’ve lost income.”
What if I’m self-employed?
Two days after Boris Johnson’s announcement of the new national lockdown and furlough extension in England, chancellor Rishi Sunak announced a fresh round of Self-Employed Income Support Scheme.
The government will be increasing support to the self-employed workers from 40% of trading profits to 80% at the end of November for the duration of the new England lockdown.
Self-employed grants will be calculated over three months so this increases the total grant from 40% to 55% of trading profits for November to January, while the maximum grant increases to £5,160.
Grants will also be paid faster than previously planned with the claims window opening at the end of November rather than the middle of December. Now the government has extended the furlough for employees affected by lockdown, there are calls to provide additional support to those who are self-employed.
“Glad to hear that the govt is extending furlough scheme til March for all of UK,” tweeted Labour MP Tracy Brabin. “The Govt must support the self-employed to March too, not just January, & extend support to over 3 million self-employed who are still out in the cold.”
What happens when this lockdown ends?
A new Job Support Scheme was due to start at the beginning of November at the end of the original furlough extension. Under this scheme, if businesses are forced to close due to local restrictions in tier 3 areas, workers will be paid 67% of their wages, up to a maximum of £2,083.33. Sunak’s additional extension of furlough to the end of March has delayed the introduction of this scheme.
When England comes out of lockdown, the government suggests regions will be re-classed into tiers as before, based on their coronavirus risk level. This will be dependent on a vote from government on whether lockdown is extended again.
The furlough extension plans will be reviewed in January, Rishi Sunak has said.