What will happen when furlough ends?
From 1st July, the Coronavirus Job Retention Scheme — more commonly known as the furlough scheme — will be slowly phased out.
As the furlough scheme ends, the amount your employer must contribute to your wages will gradually increase, as the government’s contribution decreases. By October, you’ll no longer be paid for hours not worked.
Employers will start to decide whether they can afford to pay staff for their normal full-time hours. For those on furlough, this is likely to mean one of three things:
1. Your employer will bring you back to work your normal hours
2. Your employer will bring you back to work but you’ll work fewer hours
3. Your employer will dismiss you or make you redundant
You can contact Citizens Advice for information on any employment issue or for help accessing additional financial support. Our contact details are at the bottom of this page.
We will take a look at the three possibilities above in turn.
Returning to full-time hours
In this case, your working hours should be similar to what you worked pre-lockdown. Your income should therefore increase from what you were getting on furlough, as you’ll be paid your full wages rather than the 80% you’re currently getting for furloughed hours.
While some people are looking forward to life getting back to normal, others have reported feeling anxious about returning to the workplace after lockdown. You should talk to your employer if you have any concerns about returning to work. You can also visit www.mind.org.uk, for information and advice on dealing with anxiety and other aspects of your mental health.
Working fewer hours
Eventually, you’ll stop being paid for hours you don’t work and your income will reduce. You may be able to claim benefits to cover some of the lost income. If you aren’t already getting benefits, it is likely to be Universal Credit you should consider claiming.
If you’re already claiming Universal Credit, the DWP should automatically be informed of what you are paid and the amount you receive will go up or down to reflect any changes to your working hours.
If you’re claiming Working Tax Credit, you may be at risk of losing entitlement and might need to switch to Universal Credit. To claim Working Tax Credit you must be working more than 16, 24, or 30 hours depending on your circumstances. While the furlough scheme is open, the rules on minimum working hours have been relaxed where the changes are temporary.
However, you should call Citizens Advice if you are on Working Tax Credit and expect your hours to be reduced once the furlough scheme ends. We can discuss how you may be affected by a permanent reduction in hours and look at additional or alternative support available to you.
In any case, it is always worth looking at ways to boost your income. Burnley and Pendle Citizens Advice can check your entitlement to benefits. Our contact details are at the bottom of the page.
Dismissed or made redundant
In this case your income will stop. You should check your entitlement to state benefits and can contact us on the numbers below for help with a calculation.
Your employer will owe any holidays you have not yet taken. They must also allow you to work your notice period, or dismiss you immediately and pay you for the hours you would have worked. If you have worked for the same employer for longer than 2 years you may also be entitled to redundancy pay. You can read a longer post on redundancy here.
Remember: any holiday or redundancy pay you receive must be based on your normal rate of pay, not what you’ve been getting while on furlough.
Who Should I Call?
For advice on the furlough scheme or Working Tax Credit you should contact our HMRC team. You can request an appointment by email at hmrc@pendle.cabnet.org.uk or by calling 07883 572 175.
To check your eligibility for Universal Credit, or to get help applying, call our Help to Claim service on 0800 144 8 444.
For all other queries, call our Adviceline on 0800 144 8848.
Disclaimer: This information was correct at time of publishing on 8 July 2021 and is provided as a guide only. It is not a recommendation to take a specific action and we suggest you speak to an adviser if you have any doubt about how the law applies to you.
