Who qualifies for Rishi Sunak’s new furlough scheme and how to apply for support

Who qualifies for Rishi Sunak’s new furlough scheme and how to apply for support
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Rishi Sunak has announced a six-month furlough extension for millions of people who remain out of work due to lockdown restrictions.

The Chancellor said the new scheme will support businesses who have been forced to close – and those that remain closed – including in the arts and hospitality sectors.

Addressing the nation on Friday, he said the government will pay two thirds of employees’ wages over the next six months up to a value of £2,100 per worker.

Under the scheme, set to start on November 1, firms that are legally required to close due to local or national restrictions will receive grants to pay staff up to two thirds of their salary.

The measures come after pub chain Greene King warned of hundreds of job cuts due to 10pm restrictions and local lockdowns

Employers will not be required to contribute towards wages under the plan, but will be asked to cover national insurance and pension contributions.

The U-turn comes a fortnight after the Treasury announced plans to extend furlough from November 1 – however only for part-time employees.

Chancellor of the Exchequer, Rishi Sunak, said: “Throughout the crisis the driving force of our economic policy has not changed.

“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.

“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”

Who qualifies?

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Under the expansion, firms whose premises are legally required to shut over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work.

The scheme will also cover businesses that have remained closed since March because of the government’s restrictions. This includes nightclubs, strip clubs and and some sports venues.

However, the scheme will not come into force until November 1 with the first payments made in December – meaning it won’t cover Northern pubs and restaurants that may have to close due to local lockdowns next week.

It also won’t support those whose hours – and profits – have fallen due to UK-wide curfew restrictions, with these businesses advised to claim part-time furlough instead.

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To be eligible employees must have been on their employer’s PAYE payroll on 23 September, 2020.

Employees will only be able to claim if they have been off work for a minimum of seven consecutive days.

Russell Nathan, head of hospitality at accountancy firm HW Fisher said the government needs a clear roadmap for the future of the hospitality sector.

“It’s a serious time for British business. The extension to furlough measures are reassuring, especially for those in hospitality who are forced to shut their doors, but the Government are still missing the mark when it comes to a long term strategy,” he said.

“Christmas is less than 80 days away and is the biggest revenue driver of the year for those in hospitality and retail – the next 3 months is normally the quarter in where they make their profit for the year.

“Hospitality is quick to be blamed for the virus spread but the evidence shows it is not the black spot. Measures such as the 10pm curfew are having a disproportionately negative effect on the industry relative to the benefits. The Government must now focus on building a clear roadmap to support businesses to scrap the 10pm curfew, extend insolvency protection, tackle the Landlord issue, and make a plan that will last beyond the next month. The Chancellor might not be able to save all businesses – but he can save more.”

How much will I get?

The Government said it will pay two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.

This is higher than the state’s current contributions which are capped at £1,875 (70% of wages) but lower than its initial contributions which were up to £2,500 until August.

Employers will not be required to contribute towards wages under the plan, but will be asked to cover national insurance and pension contributions.

How to apply

The Treasury is yet to release details on how to apply for the scheme, however it’s expected to launch on the Gov.uk portal in the coming weeks.

The scheme will run for six months, starting on November 1, with a review due in January.

These measures will sit alongside the original Job Support Scheme and the £1,000 Job Retention Bonus which will pay employers £1,000 for every employee they keep on until February.

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