UK Covid-19 furlough scheme opens amid fear of ‘flood’ of claims

The government’s coronavirus job retention scheme (CJRS) opened for applications at 8am on Monday, with employers expected to claim for millions of workers put on temporary leave because of the crisis.

Chancellor Rishi Sunak said: “Exactly one month ago today I announced the unprecedented decision to step in and help pay people’s wages. We promised support would be available by the end of April – today, we deliver our promise.”

Under the scheme, the government will cover 80% of workers’ wages, up to £2,500 a month, if they are not working but kept on their employers’ payroll. Workers across the economy have been furloughed because of the Covid-19 lockdown.

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The system can process up to 450,000 applications an hour. Employers should receive the money within six working days of making an application, the Treasury said.

HM Revenue & Customs has deployed 9,500 staff to deal with queries, including 5,000 on web chat, but there are fears that the website could crash and that telephone lines could also be overwhelmed. This would mean that workers do not get paid, or that businesses that pay their staff go bust. Within an hour of opening, HMRC said the system was coping well so far.

UK government support for workers and businesses during the coronavirus crisis

Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.

Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.

Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.

Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.

Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.

Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.

Local authorities to get a £500m hardship fund to provide people with council tax payment relief.

Mortgage and rental holidays available for up to three months.

The CJRS has been extended until the end of June, after the government decided to keep Britain in full lockdown for at least a further three weeks. Employers can only claim for furloughed employees who were on their payroll on or before 19 March.

Adam Marshall, director general of the British Chambers of Commerce said: “The opening of the job retention scheme is an important milestone for businesses, who can now begin to access the cash they need to pay their staff and protect livelihoods.

“The government deserves credit for the speed, scale and flexibility of its response to the challenges facing our business communities. The focus should now be on delivering this support to firms on the ground.

“Our research indicates that two-thirds of firms have furloughed some portion of their workforce. With April’s payday approaching, it is essential that the application process is smooth and that payments are made as soon as possible. Any delay would exacerbate the cash crisis many companies are facing and could threaten jobs and businesses.”

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