Coronavirus: Financial Help for Employees in the UK

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By Cai Bradley
Updated on Wednesday 27 May 2020

Telephone employees working during coronavirus

The current state of affairs is a difficult one for everybody in the UK, including employees of businesses both big and small.

Due to the impact of Coronavirus (COVID-19), many people have needed to take time off work due to illness, self-isolation, or caring for loved ones, while others may even be laid-off due to a lack of work.

During this unprecedented time, it’s important that you understand your rights as an employee to protect yourself and your family, and bear in mind that there is support out there to help you get through it.

The government’s Coronavirus Job Retention Scheme – for workers on ‘furlough’

Under the new Coronavirus Job Retention Scheme, the state has agreed to pay 80% of your salary up to a maximum of £2,500 per month if you’re furloughed during the Coronavirus outbreak.

The scheme allows employers to put staff who are unable to work on hold (furlough) without losing much of their income, as the government will cover 80% of their usual wage. It essentially works as if your job has been put on standby, with the idea being that you will be able to instantly restart work as normal when the COVID-19 crisis comes to an end (whenever that may be).

Furlough meaning: A furloughed worker is someone whose employer is unable to pay their salary as a result of the coronavirus outbreak and who has been told to stop working. They haven’t lost their job or been made redundant, but their employer can get government support to help pay their staff a percentage of their salary.

Note: Your employer can top-up the furlough grant to cover your full salary while you’re furloughed, but not all companies will do so and they are not legally obliged to.

Employers decide which employees are furloughed and it can be for a variety of reasons, including if you are unable to work due to self-isolation, or the work your department usually does has dried up due to the Coronavirus outbreak.

Your furlough pay will be issued through grants “before the end of April”, according to government officials and Martin Lewis’ MoneySavingExpert, with wages being backdated to the 1st of March 2020.

Tax and National Insurance contributions are applied to the furlough wage you receive, and you retain all the rights you had as if you were working as normal in relation to things like statutory sick pay, maternity pay entitlement and redundancy payments.

Coronavirus furlough scheme update: Rishi Sunak, Chancellor of the Exchequer, has confirmed that the scheme will now run until October, at least. He stated that eligible employees will continue to receive 80% of their wages up to £2,500 per month, but that the government will begin to ask for help from companies who will "start sharing" the costs. 

Around 7.8 million people are being furloughed through the government's scheme as of May 2020, which has resulted in a total cost of £14billion a month!

Can I take a second job while being furloughed?

Contrary to popular belief, there are no rules that say you can’t take a job elsewhere while on furlough with your existing employer.

Your employment contract may not allow it though, so be sure to check with your employer before you start looking at working elsewhere while you’re furloughed.

Previous employers can rehire you to furlough you

If you have recently lost your job due to Coronavirus or voluntarily resigned and was stuck between jobs, you could be eligible for furlough through your previous employer.

You will be entitled to receive furlough if:

  • Your previous employer agrees to take you back onto its payroll,
  • AND you were on its payroll on the 28th of Feb 2020.

There is no guarantee that your previous employer will agree to have you back on its payroll, but it’s worth enquiring.

New rules allow statutory sick pay from day one

If you need to take time off work due to being unwell from COVID-19, then you will be entitled to your usual statutory sick pay (SSP) from the first day, rather than day four as it otherwise would be.

SSP is currently £95.85 a week and there are some eligibility requirements, including that you must be employed and earning an average of £120 or more per week.

The new rules only apply to those self-isolating due to Coronavirus-related issues, and no other reasons.

To be eligible, you must be self-isolating for an official reason, meaning that you or someone in your household has COVID-19 symptoms, or a member of the NHS (a doctor or NHS 111 team member) has advised you to self-isolate.

Taking time off work for family reasons during COVID-19

If your child’s school has been shut due to Coronavirus, which is almost guaranteed at this stage, you should be able to take time off work to look after them, but there’s no guarantee that you will be paid.

UK law means that employees have a right to take time off work to support a dependant during an unexpected event – which Coronavirus certainly is – but it is not a legal requirement that you must be paid for this.

Some employers will offer paid time, while others won’t – it depends on the policy of the workplace.

There is no official time-limit on how long you can stay off work for, but the government has said that it has to be ‘reasonable for the situation’, and that it is under active review.

You also have some other options, including taking annual leave or unpaid (paternal) leave if you need to spend a longer period away from work.

It’s also worth noting that you have the legal right to ask for flexible work opportunities, as long as you’ve worked for the employer for at least 26 weeks, and the workplace must consider your request and handle it in a “reasonable manner”. This includes asking for amended working hours, reduced hours, or even working from home.

The situation will differ between each workplace, so it’s important that you talk openly with your employer and see what it can offer you during this difficult time.

Carrying over unused annual leave during Coronavirus

With millions of people having to cancel their trips or holidays due to Coronavirus, many employees will be left unable to use much of the annual leave that they had planned beforehand. However, new rules have been enforced which mean that you might be able to carry over your unused annual leave for up to 24 months.

If you’re unable to use your full allowance before the year comes to an end, the government has confirmed that ALL workers (not just key workers) who have worked during the Coronavirus outbreak will be able to carry over any unused annual leave for up to two years.

Your company must have been affected by COVID-19 in order for you to be eligible, but what business can legitimately say that it hasn’t been affected by this crisis in some way?

Get a tax relief when working from home

If you’ve been asked to work from home by your employer – like millions of others in the UK at the moment – you are eligible to claim for any increased costs as a result of doing so, including things like heating and electricity.

It can be difficult to work out the exact increase in costs, but you are instead able to claim a ‘working from home allowance’ at a set rate by either:

  • Being paid £6 per week extra (tax-free) by your employer,
  • Or claiming a tax relief on £6 of income per week, which amounts to £1.20 per week (around £60 a year) for basic rate taxpayers.

We recommend doing the latter, as many firms are already struggling during the outbreak, without being asked to fork out even more in wages. You can do so by applying directly to HMRC for the tax relief.

As long as you are claiming tax relief on the equivalent of no more than £6 per week for the duration you have worked from home, you won’t have to provide evidence of the additional costs or bills you’ve had to pay, which makes it all the more accessible.

Coronavirus updates at Compare UK Quotes

Here at Compare UK Quotes, we are constantly looking for ways to help our site’s visitors make the most of their money.

We can’t give you the latest health advice, but what we can do is help you understand what this crisis means for your personal finances and how you can make the most of your rights as an employee.

For more information, see our related guides:

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