Chancellor Rishi Sunak has announced a series of unprecedented measures to help fight the coronavirus crisis.
The government has announced it will help pay people’s wages with all employers able to apply to HMRC to pay the wages of people who are furloughed.
“Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll rather than being laid off," Mr Sunak said.
But what does furlough mean?
The definition of furlough is to allow or force someone to be absent temporarily from work.
In this case that means anyone asked to stop working during the coronavirus pandemic, but who is not made redundant.
The government has said companies who cannot pay for staff during the Covid-19 crisis can get government support to pay wages to avoid redundancies.
Mr Sunak announced on March 20 that the government will pay up to 80% of wages of furloughed employees, up to a maximum of £2,500 a month in a process called the Coronavirus Job Retention Scheme.
The government website adds: "If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker.
"This would mean that you are kept on your employer’s payroll, rather than being laid off.
"To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
"You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
When he announced the scheme, Mr Sunak said there was “no limit” on the amount of money payable through the scheme which is backdated to March 1 and will run for an initial period of three months.
“It covers everybody who is on the PAYE system through a company," he added.
The government also says that if anyone's salary is reduced as a result of the changes may be eligible for support through the welfare system, including Universal Credit.
This will be particularly important for those working in the hospitality industry. Moments before Prime Minister Boris Johnson ordered pubs, clubs, theatres, cinemas, gyms and restaurants to close.
Other announcements made by the Chancellor and Prime Minister Boris Johnson included:
- Universal Credit raised by £1,000 a year. The "standard allowance" of £323.22 a month for single people and £507.37 for couples will be raised for the next year
- Working Tax Credits will be raised by the same amount
Since then the Prime Minister has announced that non-essential travel must cease as part of a UK lockdown.
