MSE News

Furlough scheme extended by one month

Furlough scheme extended by one month

The Government's Coronavirus Job Retention Scheme, which allows firms to furlough employees, is to be extended by one month and will now run until the end of June at least.

Under the scheme, which was unveiled last month, employers can put employees on furlough, which is where your job's put on hold and you don't work, but you're still employed and the state finances 80% of your salary up to £2,500/month.

The scheme won't officially start taking applications from companies until next week, but firms will be able to backdate claims to 1 March 2020 and so have already been putting employees on furlough. The scheme was originally due to pay people's wages for three months (so until the end of May 2020), but the Chancellor Rishi Sunak said today that this will be extended, following the extension of the national lockdown yesterday.

The move means those who are furloughed will have state support for their salary from March 2020 all the way to the end of June 2020 – and that will apply whether you've already been furloughed or are furloughed in the coming weeks.

When the furlough scheme was first announced, employees had to be on a firm's PAYE payroll on 28 February 2020 in order to qualify, but the Government extended that cut-off date to 19 March 2020 earlier this week. See full details in our Furlough cut-off date extended MSE News story.

The Treasury says future decisions on the scheme "will take into account further developments on the wider measures to reduce the spread of coronavirus", as well as the "responsible management" of public money, so the scheme could be altered or further extended in the future.

Here's MoneySavingExpert.com founder Martin Lewis' reaction to the extension:

For more info on how this scheme works, see the key need-to-knows about furlough.

What does the Chancellor say?

Chancellor Rishi Sunak said: "We've taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.

"It is vital for people's livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery."