Coronavirus Guidance: What the ‘Furlough’ scheme changes mean for you

With the Furlough scheme ending in October, the government has announced new measures to provide economic relief for workers and employers. What does this mean for you?

Furlough scheme update written in text

As things change rapidly during the coronavirus (COVID-19) crisis, this guide will be updated regularly to reflect changes in rules and regulations.

Lockdown Support Scheme

Chancellor Rishi Sunak has announced new measures of economic relief, called the Lockdown Support Scheme (LSS). The scheme is meant to provide relief from the economic impact due to rising coronavirus cases, for those who are in tier 3 regions of the recent lockdown restrictions put in place. The LSS will replace the Coronavirus Job Retention Scheme (CJRS) starting 1 November and last for six months.

For those in tier two regions, the only help available will be the standard Job Support Scheme (JSS), which has also been amended to provide more support.

What are the changes to the Job Support Scheme?

The JSS, starting 1 November, will be more generous for businesses.

To be able to receive support through the JSS if you’re working part-time, you’ll need to meet the following three criteria:

  • You need to be working 20% of your regular contracted hours – previously you had to work at least a third (33%) of your normal hours to qualify.

  • Your employer will only need to cover 5% of your wage – up to a cap of £125 per month – for the hours you don’t work

  • The government will cover 62% of your wage – up to a cap of £1,542

  • You would still lose a third of your wages.

These caps are based on a monthly reference salary of £3,125.

If you’re unsure whether you’ll be able to get financial help from the Job Support Scheme it’s worth speaking to your employer to find out more.

Will you be eligible for the Job Support Scheme for part-time workers? 

For employees:

  • You need to be working a third of your regular contracted hours

  • You also need to have been employed from 23 September, whether you were furloughed or not

  • You need to be on your employer’s PAYE (pay as you earn) payroll.

For employers:

  • All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme (CJRS)

  • Large employers (with 250 or more employees) will have to meet a financial impact test, so the scheme is only available to those whose turnover has stayed level or is lower now than before experiencing difficulties from COVID-19.

Furlough scheme changes

The government’s CJRS has been a help to millions of employees across the country who have been unable to work due to lockdown and social distancing rules.  

The CJRS, also known as the ‘Furlough’ scheme was designed to cover 80% of a furloughed worker’s monthly salary, up to a cap of £2,500 per month. The scheme will be ending on 31 October. 

Read how the Furlough scheme works in full.

Before then, there are a few changes to the existing scheme that you should know about.

From 1 October the government lowered its contribution to the monthly pay bill of workers on furlough from 70% of their salary down to 60%, up to a cap of £1,875 for the month. 

To ensure that furloughed workers do not lose out as a result, their employers will have to increase their contribution from 10% of their monthly pay to 20%. 

This means that if you’re a furloughed worker the amount you receive in October should not be lower than your September payment.