Furlough extended – Job Support Scheme postponed

Although many people had predicted that Boris Johnson would need to announce a further period of lockdown, no one was sure what would be offered in terms of financial assistance for affected employers and employees.

The Government had previously been adamant that the Coronavirus Job Retention Scheme (CJRS) (the furlough scheme) would cease on 31 October 2020, and would be replaced by the Job Support Scheme. However, the additional period of lockdown has meant that this had to be reconsidered.

The latest announcement of a four week lockdown in England from 5 November through to 2 December means that the Government has been forced to extend the furlough scheme. According to the announcement given by Rishi Sunak following the Prime Minister’s statement, the Job Support Scheme is being completely postponed until the furlough scheme ends.

The furlough scheme will be more generous during the new lockdown than it was in October. The announcement states:

“[The furlough scheme] will remain open until December, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500….

“Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.”

This is therefore equivalent to how the furlough scheme was operating back in August, which will come as some relief to employers.

As this has all been announced very much at the last minute, there are of course a huge number of unanswered questions, and the Government has said it will be producing guidance as soon as possible. We will of course provide further updates as soon as we can.