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When does the furlough scheme end and what happens next?


THE furlough scheme comes to an end in just a few weeks time.

It’s changed a fair bit in recent months, but the scheme will officially come to a close at the end of September.

Chancellor Rishi Sunak first announced the furlough scheme in March 2020

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Chancellor Rishi Sunak first announced the furlough scheme in March 2020Credit: Getty – Pool

The scheme was originally due to end in March this year, but an extension was announced in the Budget as lockdown continued for longer than expected.

The furlough scheme was designed to pay temporarily laid off workers 80% of their wages – up to £2,500 a month.

It supported millions of workers during the pandemic.

The Government previously covered the whole bill for the cost of the help.

But in July companies started chipping in 10% to the cost of paying furloughed workers, and this increased to 20% in August.

Firms will continue to pay 20% of the wages of furloughed staff until the scheme closes at the end of September.

Despite the imminent ending, Unions have called for the job support to become permanent in case of further economic shocks.

The economy has started to recover from the pandemic but around one million jobs remain at risk as some businesses could still close.

Here, we explain all you need to know about the furlough scheme and when it will end.

When does the furlough scheme end?

The Chancellor announced in the Budget in March that the furlough scheme will be extended until the end of September this year.

It’s hoped the Government’s wage support will help firms get back on their feet after lockdown eases.

The scheme has since changed since it launched, with employers now chipping in to help pay for the wages of their furloughed employees.

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Businesses will continue to contribute 20% until September 30 when the scheme ends.

The Coronavirus Job Retention Scheme has protected more than 11million jobs since its creation in March 2020.

Mr Sunak said it was “only right we continue to help businesses and individuals through the challenging months ahead”.

He added: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.”

How has the furlough scheme changed and will it be extended again?

Under current furlough rules, employees get up to 80% of wages paid for hours not worked, up to a maximum of £2,500.

The amount employers have to contribute increased to 10% in July and 20% from August.

Furloughed staff may get more than this if an employer chooses to top up staff wages above the scheme grant at their own expense – but they don’t have to.

Workers also get their usual full salary for any hours they do work.

For hours not worked, employers have to cover National Insurance and pension contributions.

Workers can also be on any type of contract to be furloughed as part of current rules.

The extension to September was the latest continuation of the scheme and it has been extended a number of times already – but it won’t be extended again.

The Chancellor first announced the support on March 20, 2020, at the height of the pandemic, and said it would originally only last until May 31, 2020.

It was then extended to October 2020, and when this deadline approached, was extended again until December before being confirmed to continue into spring 2021.

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Who is eligible for furlough?

The scheme remains open, for now, to any UK organisation with employees, including businesses, charities, recruitment agencies and public authorities, providing they have a UK bank accounts and UK PAYE schemes.

Employees furloughed from May 1 until the end of September must have been on a PAYE payroll on March 2, 2021.

Workers can be on any type of contract, meaning you could still be furloughed if you are part-time or a contract worker.

It is down to the organisation to arrange the help, rather than the employees.

Large companies (with more than 250 employees) have to meet a financial impact test, as part of the rules.

It means the scheme is only available to those whose turnover has stayed the same or is lower than before Covid-19.

There is no financial impact test for smaller and medium sized businesses or charities.

If you’re self-employed, details of the fifth and final instalment of the support scheme grants have been revealed as well, but you have to claim before September 30, so there’s not long left.

What happens next?

Although furlough was designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.

We previously explained your redundancy rights if you’ve been furloughed, but you will also have rights if you are made redundant as a result of the scheme closing too.

Your employer can’t cut your hours or even give you a pay cut just because the scheme is ending either.

If your contract of employment reserves the right to vary your pay and hours though, you could see some changes from the end of the month.

It’s worth checking over your contract now so you don’t face any surprises when the scheme ends.

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There are benefit schemes you can apply to that offer financial aid that might assist once the furlough scheme has gone as well.

These could help tide you over once the furlough money has been cut off.

Universal credit is once scheme worth applying for as you could get payments between £344 and £596.58.

Otherwise you can apply for charitable grants, council tax reduction or help with your mortgage interest payments too.

What is happening to the Job Support Scheme?

The Job Support Scheme (JSS) was set to replace furlough and run for six months from the start of November 2020 to the end of April 2021.

The scheme aimed to continue to support businesses and their employees facing coronavirus-related woes, and was expected to come into effect in December.

The Chancellor hoped the JSS extension would reduce the millions of job losses expected when furlough ends.

But rising cases of coronavirus, another lockdown and a troubling economic outlook led Mr Sunak to continue the furlough scheme for longer instead.

Under the JSS, employees could work one day a week and earn up to 73% of their wages.

It was designed to help employees working for businesses that shut down in areas put under previous Tier 2 and Tier 3 restrictions.

Employees on the scheme would have needed to have worked a minimum of 33% of their hours to be eligible, and businesses had to contribute a third of wages.

But the scheme is not expected to return when the furlough scheme ends in September.

Rishi Sunak vows furlough WILL end in September and no plans to extend it

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