The furlough program was established in Spring 2020 to prevent people from losing their jobs because of the pandemic. The Government initially paid 80 percent of wages to people who couldn’t work or were unable to afford them. Workers who were eligible for furlough assistance received payments up to PS2,500 per month.
Employers were required to contribute 10 percent to their workers’ wages as of July 2021. The Government contributed 70 percent.
The Government reduced their contribution to 60 percent in August and September 2020, while the employers were paid 20% of workers’ wages.
Furlough (also known as Coronavirus Job Retention Scheme) will end September 30, 2021.
The most recent Government statistics show that around 1.6 million people are still in furlough.
The number of people who were able to get off the plan in July slowed and then plateaued during the first half August.
Only 340,000 workers left protection of furlough in July, a sharp decrease on the June drop of 550,000.
Due to the extent of the pandemic, the majority furlough is currently being paid out by certain industries’ workers, such as travel agencies or airline employees.
London is still the “furlough capital”, with 8 out of 10 local authorities in London having the highest rates.
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According to estimates by The Resolution Foundation, one million workers could be still on furlough after the scheme’s end later in this month.
Many of these individuals may be able to return to their chosen professions within a matter of weeks, but it’s possible for some people to lose their job completely.
Charlie McCurdy (Economist, Resolution Foundation) outlined the reasons why so many workers are at risk in the end of the furlough program.
McCurdy stated that “the number of people on furlough this summer has slowed down to a trickle as certain firms and sectors, notably in overseas tourism, struggle to get back to their pre-pandemic activity levels.”
According to the report, as many as a million workers could be still on furlough after the scheme ends at the end this month.
We expect the majority of these employees to resume their former roles. However, we may see an increase in unemployment.
Given these facts, it is inappropriate to reduce Universal Credit by PS20 per week. “The Government needs to change its course.”
One of many institutions forecasting a rise of unemployment after the scheme’s end in September is the Bank of England.
What happens when furlough is over?
The scheme will end and the government won’t be able to support employers or pay additional wages for employees after it ends.
Anyone who is concerned about the status of their job after furlough should contact their employer to get clarification.
It is crucial that someone who is about to lose their job is able to apply for assistance schemes immediately.
For those who are made redundant, the main support is provided by the Department of Work and Pensions’ Jobseeker’s Allowance.
JSA payments are currently at PS59.20 per week for claimants younger than 25 and PS74.70 per week for those over 25.
Publiated at Sun, 12 Sep 2021 13,32:00 +0000