The government set up a Job Retention Scheme that provides grant payments to employers who 'furlough' their workers because their business has been adversely affected by the Coronavirus outbreak.
The scheme was originally set to last until the end of June 2020, but has now been extended until end of April 2021 - but with some changes over time as set out below.NOTE: The scheme closed to new entrants from 30th June 2020.
The JRS grant for the period November to end April 2021 is set at 80% of an employee's wages for hours not worked (up to a cap of £2500 per month). Employees can be fully furloughed or work part time.
Employees can check if their employer is entitled here.
From this point onwards, an employer is only able to furlough employees who they have furloughed for a full three-week period prior to 30th June.
Guidance for employers and whether they can claim and how - click here
Guidance about the scheme has been published by the government - click here.
Impact on benefitsTax Credits and Universal Credit
As the employer pays the employee a wage and then requests a reimbursement from the government, then the employee will be treated as working their normal hours. More on Tax Credits for furloughed workers here
, and UC for furloughed workers here
. And those on Universal Credit will have a 'work allowance' applied if they have a child or they are or their partner have a 'limited capability for work'.
Contributory ESA / New-Style ESA
All the Guidance
says is that payments from the Coronavirus Job retention Scheme
are considered to be earnings for Contributory ESA / New-Style ESA purposes.
Contribution-Based JSA / New Style JSA
Where someone is on furlough they will be considered to be working their normal hours so if they were working 16 hours or more a week before the Coronavirus outbreak then they would still be treated as working those hours and therefore considered to engaged in remunerative work - and therefore not entitled to Contribution-Based JSA / New Style JSA. Confirmed in Guidance.
All the Guidance says is that payments from the Coronavirus Job Retention Scheme are considered to be earnings for Carers Allowance purposes.