The Coronavirus Job Retention Scheme (CJRS), which is often known as the furlough scheme, has allowed employers to place employees on furlough for hours they have not worked since March 2020. The scheme has gone through many variations, with the amount of support the Government offered changing throughout different points of the pandemic. In its current form, the furlough scheme covers 80 percent of an employee’s wages for hours not worked, capped at £2,500 per month.
Is furlough still available?
The Coronavirus Job Retention Scheme was extended by Chancellor Rishi Sunak in late 2020 in response to ongoing lockdown measures in the UK.
The scheme has been extended until April 30, 2021, and any furlough claims for days in January 2021 must be made by February 15, 2021.
People who created and started a PAYE payroll scheme on or before October 30, 2020 may be eligible to claim from the Coronavirus Job Retention Scheme.
Claimants must also have enrolled for PAYE online and have a UK, Isle of Man or Channel Islands bank account to be eligible for the scheme.
Only employees who were on the payroll on October 30, 2020 are eligible to be furloughed by their employer.
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Will the furlough scheme be extended?
The Government is facing significant pressure to extend Government support past April 2021 to help preserve jobs and support businesses.
Think tank the IPPR estimates up to nine million jobs could be at risk if business support isn’t extended.
The think tank warned almost 600,000 UK firms could collapse this spring without an urgent extension of government aid.
Carsten Jung, IPPR’s senior economist, said: “This is a moment of great peril for more than half a million UK employers as their cash reserves run perilously low and their businesses hang on by a thread.
“More firms are already at risk than at any time during the pandemic began, and in the worst hit industries such as hospitality and the arts, at least two in five employers are in the cash danger zone.”
George Dibb, head of IPPR’s Centre for Economic Justice, added: “Millions of people’s jobs and livelihoods depend on the Chancellor stopping firms going broke just as the pandemic is coming under control, and ensuring that they have enough cash not just to limp through this crisis but to come roaring out of it when lockdown ends.
“By extending and improving the current support schemes, and by taking the new route of injecting cash into firms in return for a long-term stake in their future, the Government can ensure that our best businesses survive and can leap back into action as our economy recovers from this long hibernation.”
Presently, the Government has not addressed whether the furlough scheme will be extended past April.
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At Prime Minister’s Questions this week, Labour leader Sir Keir Starmer pressed Boris Johnson to extend the furlough scheme, business rates relief and VAT cuts for the hospitality sector.
However, the Prime Minister did not answer when asked about furlough running beyond April and advised Sir Keir to wait for the Budget announcement.
The Chancellor is expected to provide an update on the Government’s business support going forward on March 3 during the Budget announcement.
However, after several months of mammoth public spending during the pandemic, Mr Sunak could choose not to extend the furlough scheme in its current form.
The Job Support Scheme (JSS) was due to start in November 2020, but it was scrapped and replaced with an extension of the furlough scheme due to rising Covid cases and the second lockdown.
Mr Sunak could introduce this scheme, or a variation like it, after the furlough scheme ends.
The terms of JSS originally offered a more tapered form of support, with support determined by how individual businesses have been affected by the pandemic.
The scheme was still intended to be used to pay staff wages, but the support offered was significantly less than is currently offered by the furlough scheme.