Covid: How is furlough changing from July 1 and what does it mean for your wages?

The government's furlough scheme, offering support to employees out of work due to the Covid pandemic, is changing from today, July 1.

Here's how and what it means for your wages.

What is furlough?

If you are furloughed then your employer is keeping you on the payroll, paying you 80% of your salary, while the business has less work than normal during the pandemic.

While on furlough you cannot undertake work for or on behalf of your employer.

Many businesses across the UK have found themselves forced to close, or run at heavily reduced capacity, during the pandemic - hence furlough, officially called the Coronavirus Job Retention Scheme.

Official figures show around 3.4 million people are currently on furlough, with a total of 11.5 million jobs supported by the scheme over the course of the pandemic.

Experts are worried that the full extent of Britain’s jobs problems has been hidden by the Government’s furlough scheme. Credit: PA

What's happening on July 1

Employers can currently claim for up to 80% of workers' salaries under the scheme, worth up to £2,500 a month.

The government stumps up that 80% while employers meet the cost of National Insurance payments and pension contributions.

From July 1, employers will have to take on more - paying 10% of their furloughed workers' salaries while the government covers the remaining 70%.

Workers will see no change to wages and will still receive 80%.

So does this mean furlough is ending?

Not yet.

We've seen this before, the last time the government had planned to bring the furlough scheme to an end before a new wave of Covid got in the way and fresh lockdowns.

This is, however, the beginning of the end,

From August 1, the amount employers will pay rises to 20% until the scheme comes to an end in September - by which time all Covid restrictions should have been lifted.

Still, workers will be seeing 80% of their salary in their pay check.

Boris Johnson and Rishi Sunak appeared together the day after the Budget announcement. Credit: AP

And will that be the end of furlough for good?

That is the plan.

Chancellor Rishi Sunak has said, despite England's final easing of lockdown restrictions being delayed a month, the furlough scheme will not be extended.

That may be contingent, however, on us not facing another wave of Covid.

The scheme had been due to close on 31 October 2020 before the UK saw a second wave of coronavirus.

What are my rights under the furlough scheme?

According to HM Revenue and Customs (HMRC) furloughed employees have exactly the same rights they did when working.

This means you are still entitled to statutory sick pay, maternity and other parental rights, the right against unfair dismissal and redundancy payments should you lose your job.the

The furlough scheme helped support workers in industries forced to shut, like theatre. Credit: PA

What about those ineligible for furlough?

Freelancers and those who are self-employed have not been covered under the furlough scheme for the duration of the pandemic.

The government's Self-Employed Income Support Scheme was introduced to help workers in these categories - offering grants calculated at 80% of three months' average trading profits, capped at £7,500 in total.

These grants have been available at four points throughout the pandemic so far, with a fifth grant (covering May 2021 to September 2021) open to claims from late July 2021.

Do I need to do anything now things are changing?

Your employer is responsible for claiming through the Job Retention Scheme on your behalf and for paying you what you are entitled to.

You cannot apply for the scheme yourself.

Both you and your employer must agree to put you on furlough - so speak to your employer about whether they can claim.

Once agreed your employer must confirm in writing that you have been furloughed to be eligible to claim.

Contact your employer if you do not receive confirmation.

If you are concerned that your employer has not claimed on your behalf, you should speak to your employer.

HMRC will not be able to provide information about individual applications.

Want more Covid info? Check out our podcast - Coronavirus: What You Need To Know