The UK Government is picking up the wage bills of 8.7 million furloughed workers, who are unable to do their jobs because of the coronavirus pandemic.
Around £17.5 billion has been claimed by more than one million firms who have sent their staff home as the country went into lockdown in a bid to slow the spread of Covid-19.
Thousands of furloughed workers face uncertainty after Chancellor Rishi Sunak announced that UK Government support will end on October 31.
The Chancellor said companies would have to begin to take some of the burden of paying 80 per cent of the wages of 8.4 million workers currently at home because of economic lockdown caused by the Covid-19 pandemic.
During June and July the UK Government will continue to pay 80 per cent of people’s wages and from next month, employers will also be able to bring staff back to work part-time.
The furlough scheme will close to new entrants on Wednesday, June 10, 2020 – so if an employer hasn't furloughed a member of staff by then and made at least one claim for furlough support, it won't be able to access the scheme and put employees on furlough later.
From August, the level of UK Government grants provided through the Coronavirus Job Retention Scheme will be slowly tapered to reflect that people will be returning to work.
On the face of it, this doesn't affect employees, but there could be a “serious consequence” of this timetable, warns MoneySavingExpert.com.
Martin Lewis said: “While employees must still receive at least 80% of their salary, from August employers will be asked to start to pay - at first just covering National Insurance and pension contribution costs.
“Each month more is added, until by October - the final month of furlough - they pay 20% of salaries towards furlough.
“Sadly, that means if firms think they can't or won't keep their furloughed staff on their books from November, they're likely to start redundancy processes soon, so people leave at or after the end of July, before firms have to contribute.”
The founder of MoneySavingExpert.com and his team have created a Redundancy rights guide here and also advise employees to consider seeking help from an employment lawyer, either directly or via a trade union or Citizens Advice if their job is in jeopardy.
Government figures released on Tuesday also revealed that 2.5 million claims totalling £7.2 billion have been made under the Self-Employment Income Support Scheme (SEISS) to support self-employed workers.
Those who are eligible for the scheme will now be able to claim a second and final grant in August - worth 70 per cent of their average monthly trading profits.
This will be paid out in a single instalment, which is set to cover three months' worth of profits, and will be capped at £6,570 in total.
Only 2.5 million of the 3.5 million eligible self-employed workers eligible for SEISS have claimed, meaning one million have not - and time is running out.
The deadline for the first claim is July 13.
Martin Lewis has expressed concern that “there are a few reasons people may WRONGLY be missing out that I'd like to clear up. Pls spread word…” he wrote in the latest edition of his weekly MoneySavingExpert.com newsletter.
Here are the reasons why Martin Lewis believes so many self-employed have not claimed SEISS
You wrongly think 'I'm working/earning, I can't claim'
Unlike the current furlough scheme, if you're self-employed you've always been allowed to claim it even if you're working and earning.
You're worried declaring 'I'm impacted by Covid-19
Doing this is part of the application, but don't overly worry, it's a very broad criteria. Unless you're deliberately defrauding, there's no claw back - just be honest.
You've been impacted by Covid-19 if one or more of these apply (or something similar).
You've not been contacted
HMRC has contacted people by letter, email or text. Yet for some, details will be wrong or this contact hasn't made it to you. If so, you can use the HMRC eligibility checker here.
The Coronavirus Jobs Retention Scheme was designed to allow companies to keep staff on the payroll.
However, experts worry that the scheme may simply be disguising massive unemployment, with sweeping layoffs potentially on the cards after it ends.
The #RaiseTheBar campaign believes access to the £25,000 Retail, Hospitality and Leisure Grant (RHLG) will enable businesses to mitigate significant stock losses and cashflow challenges, including rent, that wage subsidies do not address.
Matthew Sims, CEO, Croydon BID and co-founder of #RaiseTheBar campaign said: “The Government is in danger of pushing businesses to the brink of the abyss and in turn leaving businesses with no choice but to make serious decisions regarding their future operation, leading to redundancies and even closure.
“If this happens, the positive work of the Job Retention Scheme would have been short-lived, leaving the country, long term in a far worse position and having spent millions on financial aid supporting the employee, but ignoring the employer.”
The #RaiseTheBar campaign, launched on April 21, 2020 and is calling on the UK Government to raise the arbitrary £51,000 business rates threshold cap to £150,000, allowing over 54,638 businesses in these sectors the chance to survive.