Chancellor Rishi Sunak unveiled a six-month extension to keep the furlough scheme running until the end of September 2021 in his Spring Budget announcements.
As the spring brought no respite to lockdown measures by the time of the March financial statement, Sunak was forced to extend the furlough scheme through the summer and into the autumn.
At the Budget he announced the Coronavirus Job Retention Scheme would continue to pay 80 per cent of wages for employees until the end of September. However, employers will be expected to pay 10 per cent of their staff’s wage in July with the rate set to rise to 20 per cent in August and September.
Since March 2020, more than 11 million people have been supported through the furlough scheme and, as of January 2021, the Westminster Government was paying the wages of just under five million people.
Speaking during the Budget announcement, Sunak said: “We will continue doing whatever it takes to support the British people and businesses through this crisis.
“The Government is proud of the furlough, one of the most generous schemes in the world.”
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The move comes as the Westminster Government has been forced to bolster its jobs support package after imposing strict new Covid-19 lockdowns following the Christmas period.
Following the fall in cases last summer, Sunak had been planning to end the furlough scheme on October 31 last year, introducing a Job Support Scheme instead – a less generous system paying workers in “viable” jobs up to a third of their wages, has been put on hold.
But the second wave of cases in the autumn forced the Chancellor to scrap those plans and the furlough scheme is proving to be a lifeline once more in early 2021 as all four nations of the UK started the new year in lockdown with non-essential businesses closed.
Here we lay out exactly what’s ahead for those on furlough from their job and what your rights are if your job is at risk.
The Big Issue’s Ride Out Recession Alliance is committed to helping people stay in work, keep their homes and ultimately prevent a tidal wave of Covid-19 homelessness this winter.
How is furlough changing?
The Job Retention Scheme will now last until the end of September with the Government paying up to 80 per cent of workers’ wages (a maximum of £2,500 a month) through the furlough initiative designed to prevent mass redundancies.
The current requirements for employers are to pay for national insurance and pension contributions only.
According to the latest HM Revenue and Customs figures, 1.3 million companies have furloughed more than 11 million employees throughout the duration of the Covid-19 pandemic with £53.8bn claimed as of February 2021.
However, the Conservative Government’s massive investment has drawn criticism from opposition parties. Labour have taken issue with ministers leaving furlough announcements to the “last possible minute”, warning that it has left “businesses in the dark” and led to redundancies that could have been prevented. Party leader Keir Starmer has called for flexible furlough payments to be made available on request to working parents to allow them to look after their children during Covid-19 lockdowns.
It is unclear if the Job Support Scheme is still planned for the future. It would see workers receive up to two-thirds of their usual pay only if they could work a fifth of their normal hours.
I was already made redundant. Can I be furloughed?
If you worked for a company from March 20 2020 up until and including September 23 but were made redundant then you can be rehired and placed on the Job Retention Scheme.
Guidance from the Treasury says workers who were employed on fixed term contracts and on the payroll on September 23 before being made redundant can be re-hired and placed on the Job Retention Scheme. However there is no obligation for businesses to do this so talk to your former employer and if an employer decides to rehire an employee to furlough them they must have the consent of that employee.
How is the other support available changing?
The Job Retention Bonus, which paid employers £1,000 for every previously furloughed employee kept on the payroll until at least the end of January, is being scrapped for now due to the furlough extension. Sunak told MPs it will be “redeployed at an appropriate time”.
Firms will also be paid up to £3,000 a month, the Local Restrictions Support Grant, if local measures mean they are forced to close.
The grant already available to self-employed people whose incomes have been hit by the pandemic has been increased to cover 80 per cent of their profits, capped at £7,500 over the November-January period.
Following the announcement of the new national lockdown, Sunak announced that businesses would be able to apply for one-off top up grants for retail, hospitality and leisure businesses worth up to £9,000 per property. The Chancellor also set up a £594 million discretionary fund to help businesses through to the spring. However, these measures are only available to businesses and not to furloughed workers or the self-employed.
Is furlough going to be available outside England?
It will continue to be available in all of the UK. Leaders of the devolved nations were already calling for a furlough extension from the UK Government, to allow them to implement stricter lockdowns independently with the best shot of slowing the spread of Covid-19.
How was the Job Support Scheme going to be different from furlough?
The JSS was set to cover employees who worked at least 20 per cent of their hours (down from a third). The government would fund 61.67 per cent of all remaining unworked hours while the employer funds 5 per cent.
This means staff would be earning less than they would working full-time, with the amount lost dependent on how many hours an employer could offer – or pay – an employee. Businesses would still be expected to pay national insurance and pension contributions.
Staff could work just one day a week and qualify for the scheme — but this means the workers at companies hardest-hit by restrictions would be worse-off.
Those who worked a day a week would get 73.3 per cent of their usual pay, regardless of how little that was, compared to 78 per cent for people who could work a third of their hours.
Workers would generally be better off on furlough, but campaigners are calling for a minimum wage floor to be implemented that will ensure already low-paid employees have enough money to live on.
With the furlough scheme extended until the end of April 2021, it is unclear if the scheme will return once the Job Retention Scheme is wound down.
I’m still at risk of redundancy. What can I do?
Check if your potential redundancy is fair
Workers are protected from discrimination and from being selected for redundancy for an unfair reason like pregnancy, working part-time or having previously made a complaint about health and safety.
Using the usual selection criteria (e.g. measuring performance) may also be unfair if some of the workforce has been off work for the last few weeks or months for childcare, caring responsibilities, or shielding reasons, says charity Working Families.
Read up on how much redundancy pay you could be entitled to
Under law, there is a minimum statutory redundancy pay you should receive if you’ve been an employee for two years, and it depends on your age.
If you have worked for your company for less than two years or are self-employed, you’re not entitled to it. Bear in mind you could be denied statutory redundancy pay if you turn down a suitable alternative job from your employer without good reason.
If you are furloughed and likely to be made redundant soon, remember your redundancy pay should be based on your full wage, not what you were paid while on the furlough scheme (if you were paid 80 per cent of your wages while on furlough).
Check for what holiday pay you could be entitled to
Your employer can tell you to take any leftover holidays but must give you notice that’s at least twice as long as the leave they want you to take.
Check your notice period
If you’ve worked for your employer for between a month and two years, you’re entitled to a week’s notice. If you have been employed by them for more than two years, that goes up a week for each full year you have been there to a maximum of 12 weeks. Remember the notice period only starts when you’re formally told you will be made redundant and gives you a finishing date, not when told you’re at risk of redundancy.
You could be entitled to paid time off to look for work
If you’ve worked for your employer for two years at the end of your notice period, you’re likely to be able to claim “reasonable” time off to apply for jobs or go on training. You can take the time off at any time in normal working hours – up to 40 per cent of a week’s work – and your employer can’t ask you to rearrange your work hours to make up the time off.
Check if you get legal expenses cover through your home insurance
It could mean you get free legal help to challenge your redundancy if you think it’s unfair. And if you have a trade union at work, contact them for advice and potential representation. An employer must consult with a trade union or staff reps if more than 20 people are made redundant.
Remember being at risk of redundancy doesn’t necessarily mean you will lose your job
It could mean your employer redeploys you in another role. Consider contacting Citizens Advice if you need more support.
If you’re at risk of redundancy there are a few things you should do to check if your employer can make you redundant — no matter how long you’ve worked for your employer
⬇️ Our advice can help https://t.co/LTCmcq7Nn6
— CitizensAdvice (@CitizensAdvice) October 1, 2020
What do experts think of the new scheme?
What do experts think of the furlough scheme?
As Sunak announced that the furlough scheme would now run until the end of September in the hours ahead of the Budget, Bridget Phillipson, Labour’s shadow chief secretary to the Treasury, criticised the Chancellor for failing to give businesses and employees the certainty needed to prepare for uncertain times ahead.
Phillipson said: “These changes to support schemes could have been made months ago. Businesses and workers have been pleading with the Chancellor to give them certainty – but they have had to wait because he said it wouldn’t be appropriate until the Budget. Announcing it the night before shows the focus is on Rishi Sunak getting his moment in the sun rather than protecting jobs and livelihoods.”
But the business leaders from the Confederation of British Industry have praised the Chancellor’s action to extend the furlough scheme. Rain Newton-Smith, CBI chief economist, said: “Quite simply, extending the scheme will keep millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown.
“The furlough scheme has been a stand-out success throughout the crisis. It’s common-sense to keep the scheme going while business resilience remains so fragile for some months yet.
“As we make progress into the summer, it’s right that businesses start contributing to be part of the scheme.”
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