The Coronavirus Job Retention Scheme will now run until the end of October after the Chancellor of the Exchequer Rishi Sunak this week extended the initiative. Mr Sunak hopes during this extension, people will begin to transition back to work. But if you choose to return to work part-time, can you apply for more money such as Universal Credit?
Why has the furlough scheme been extended?
The Coronavirus Job Retention Scheme was devised in a bid to support businesses been severely affected by the coronavirus crisis.
The scheme enables companies to apply for a grant covering 80 percent of an employee’s usual monthly salary up to £2,500 excluding National Insurance contributions and pensions contributions.
This temporary scheme is in place for four months from March 1 to the end of July, after which the scheme will continue for all sectors and regions with more flexibility to assist in transitioning back to work.
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Speaking from the House of Commons, Mr Sunak said: “From August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transition back to work.
“Employers currently using the scheme will be able to bring furloughed employees back part-time.
“And we will ask employers to start sharing with the Government the cost of paying people’s salaries. Full details will follow by the end of May.”
After the end of July, the scheme will work to try to hep phase workers back into their jobs.
Firms will be expected to pick up some of the tab when they do this in order to ease the cost of furlough on the UK taxpayer.
Mr Sunak said full details about the changes will be published by the end of May.
The level of support will remain the same until the end of July, but after that point, it is possible employers will be asked to pay 20 percent of their furloughed workers’ salaries while the government pays the remaining 60 percent.
The Chancellor said: “We will ask employers to start sharing with the government the cost of paying salaries.”
In its official advice, the Treasury said: “The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80 percent of their salary, up to £2,500 a month.”
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These changes are seen as a means of paving the way for workers to begin a partial return to work.
The alterations are deemed as a way to protect employers from being forced to make workers redundant in the coming weeks.
However, it is likely to be another 10 weeks before the scheme begins and in the interim, it is possible deep redundancies may be made.
In that case, an employee will have to apply for Universal Credit.
Can you apply for Universal Credit if you are returning to work part-time?
Under the current guidance, you are not permitted to undertake any work for your employer while on furlough.
However, the announcement by the Chancellor indicates this is likely to alter from August to October to help ease employees back to work.
Some people are entitled to Universal Credit payments under normal circumstances on top of their usual salary payments or because of the reduction in their wages during furlough.
If a worker returns on a part-time basis, but is still eligible for Universal Credit they are permitted to apply for Universal Credit.
If you are eligible for Universal Credit, the earnings you receive whilst you are furloughed will be treated like any other earnings as part of your claim.
You can check your eligibility and make a claim for Universal Credit here.
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