Lockdown part two in England: Furlough scheme extended

Insights / / Bristol

With the announcement that England will go into a four-week lockdown from 5 November, the Treasury has confirmed that the Coronavirus Job Retention Scheme (aka the Furlough Scheme) which was due to end on 31 October will be extended until December.

The Furlough Scheme will revert back to paying 80% of employees’ wages for hours not worked up to a maximum of £2,500 per month. Employers will be required to cover National Insurance and pension contributions - meaning the scheme will operate as it did during the month of August.  

Flexible furlough will again be permitted, staff can work part time with employers paying for the hours worked and claiming under the scheme for furloughed hours.

Employers do not have to have previously used the scheme, however, to be eligible employees must have been on the payroll and a Real Time Information Submission made on or before 30 October 2020.

Given the announcement of the extension of the scheme only hours before it was due to end, many workers will have already been made redundant as a result of the economic impact of the pandemic. 

Employers could agree with employees who are currently working a period of notice due to redundancy to extend this further in order to continue to claim under the Furlough Scheme.

As before, the employer will pay the employee upfront and claim from the Scheme in arrears. Each claim must cover a period of seven days.

The implementation of the Job Support Scheme has been delayed until the Furlough Scheme ends.

Wales, Scotland and Northern Ireland have taken a different path to England during the second wave of the Coronavirus this autumn. Wales’ “fire-break” lockdown is currently set to end on 9 November and Scotland is due to introduce a level-based system from 2 November. However, the Treasury has confirmed that the extension to the Furlough Scheme will apply across the UK.  

Lydia Cammiade

Lydia Cammiade Associate

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