When does the government furlough scheme end? What you need to know about the end of the job retention scheme and its replacement
The government’s furlough scheme is set to end later this month.
A new job support scheme aimed at saving “viable” jobs will replace the government-run job-saving strategy fronted by Chancellor Rishi Sunak.
When does the furlough scheme end?
Chancellor of the Exchequer Rishi Sunak confirmed that the scheme would close on October 31 following the announcement of the new job support scheme in September.
The new scheme will open a day later on November 1.
Rishi Sunak said that the primary economic goal of the incumbent government was to save jobs, but that the way this is achieved must "evolve.” He said that it would be “fundamentally wrong” to keep people in jobs that only exist inside the furlough scheme, adding that the new scheme’s aim was to save “viable” jobs.
How do employers apply for the furlough scheme?
To access the Coronavirus Job Retention Scheme, employers will need to take the following steps:
- Designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- Submit information to HMRC about the employees that have been furloughed and their earnings through the government’s online portal
How soon will employers receive furlough funding?
Once HMRC have the claim and agree the employer’s eligibility a payment is made to the bank account supplied within 6 working days after making an application.
Employers are advised to apply for the scheme at least six days in advance of an imminent payroll
How does the new jobs scheme work and who is eligible?
The aim of the new scheme is to keep workers in jobs within industries which will see a decline in operations during the winter months, while also encouraging the return of furloughed staff.
Mr Sunak explained, “The scheme will support viable jobs so employees must be working at least a third of their normal hours and be paid for that work, as normal, by their employer.”
Employers are expected to cover the hours that their employees do work. On top of that, the government will split the cost with employers to cover two thirds of the hours they have lost by reducing their working hours, up to a cap of 77 per cent of their original wage.
For example if an employee works 33 per cent of their usual work pattern, the government and employer would pay an additional 22 per cent each of the employees usual wage.
The scheme will be in place from 1 November 2020 to April 2021.
Who is eligible for the job support scheme?
All small and medium sized businesses are eligible to apply for the scheme, even those who didn’t utilise the government’s original furlough scheme.
Larger businesses will also be able to apply but “only when their turnover has fallen.”
The scheme will apply to anyone who has been employed from 23 September.