You are here: Home - Household Bills - News -

Everything you need to know about being furloughed

0
Written by:
12/05/2020
If you’ve been ‘furloughed’ by your company, here’s what it means…

Being furloughed may sound scary, but it’s not necessarily a bad thing as it means you should be able to go back to your job once the coronavirus pandemic is over and things return to normal.

What is ‘being furloughed’?

Under the government’s Coronavirus Job Retention Scheme, employers can keep you on their payroll even if you can’t work because of coronavirus and the government will pay 80% of your pay, up to a monthly maximum of £2,500.

The government will also cover your national insurance contributions and minimum pension contributions.

Will I receive my salary from the government?

No, your employer will still pay your salary. They are responsible for claiming through the Job Retention Scheme on your behalf.

When does the scheme start?

Applications for the scheme opened on 20 April. HMRC says money should be in employers’ bank accounts within six working days – assuming the application is correct.

Will my company top up my salary?

Your employer can top up the remaining 20% of your salary if they wish but it is not mandatory.

Can I continue to work if I’ve been furloughed?

You are not allowed to undertake work for your employer while on furlough.

However, depending on your contract, you may be able to work elsewhere. Second jobs will not affect your employer’s ability to claim under the government scheme.

Who can be furloughed?

Anyone who works for an employer with a UK payroll and a UK bank account can be furloughed, as long as they were on their employer’s payroll on or before 19 March (this date was extended from the original 28 February 2020 date).

If you left your job after this date, either because you were made redundant or for a new job, you can be rehired by your old firm and furloughed.

You can be on any type of contract, including a zero-hour contract or a temporary contract and you can be furloughed if you are a foreign national.

How long can I be furloughed for?

The minimum furlough period is three consecutive weeks. The Coronavirus Job Retention Scheme was originally in place for three months starting 1 March 2020, however it has now been extended until the end of October.

From August, employers currently using the scheme will be able to bring furloughed employees back to work on a part-time basis, but employers will be asked to pay a percentage towards the salaries of their furloughed staff. More detail on this is expected at the end of May.

Does being on furlough affect benefits?

As being furloughed means a change in your circumstances, a number of benefits can be affected by the amount you earn. The main ones are Universal Credit, Working Tax Credits and Housing Benefit. See our Furlough and benefits guide for more information.

What does furlough mean for my pension?

There is currently no change to the automatic enrolment rules for Defined Contribution pension schemes, the timescales for contribution payments nor any allowances for a payment holiday.

This means unless you are told otherwise, your own pension contributions and your employer’s contribution will continue at the current percentage but will be based on the amount you are paid while on furlough rather than your normal salary. See our Furlough and pension guide for more information.

Furlough and maternity entitlement

Furloughed workers planning to take paid parental or adoption leave (on or after 25 April) will be entitled to pay based on their usual earnings rather than a reduced furloughed rate, the government confirmed. See our Furloughed workers to receive full parental leave pay for more information.

What happens if I’ve booked holiday during furlough?

Annual leave can be taken at the same time as furlough and this means your employer must pay you your standard rate, rather than the reduced rate under the furlough scheme. Whether you are able to cancel or amend your holiday leave is down to individual employers.

The law was recently changed to allow carry over into the next two leave years where it’s not been reasonably practicable to take it in this leave year because of coronavirus. However, this isn’t an automatic entitlement.

Training during furlough

Workers can undertake training and are encouraged to do so as long as they’re not providing any service for the business or generating revenue. Here they’re entitled to be paid at least the national minimum wage for this time which should mostly be covered by the 80% job retention scheme. However, government guidance confirms firms may be required to top-up salaries where wages fall below the minimum requirement.

The government is also offering free online courses to adults at home due to the coronavirus lockdown.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • "The government needs to support the removal of non-ACM cladding from buildings that are under 18 metres as well,"… https://t.co/WW5ONNqBdH
  • RT @DASLegalUK: The nation has turned to online shopping, but what are our retail rights if we face issues with delivery, faulty items, ret…
  • The nation has turned to online shopping, but what are our retail rights if we face issues with delivery, faulty it… https://t.co/HOAf3COpYK

Read previous post:
130 million old £1 coins still out there: what to do if you have one

An estimated 131 million old round £1 coins have yet to be returned to the Royal Mint, nearly three years...

Close