Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reason furlough pay for people who were originally furloughed in March 2020 and have retained their job is determined solely by their pre-pandemic earnings, including in circumstances where those people went on to work more hours in the months between the March and November 2020 covid-19 lockdowns.

The Coronavirus Job Retention Scheme (CJRS) was designed to operate at significant scale to sustain individuals at 80% of their pre-coronavirus income, up to a maximum grant of £2,500 per month. It was therefore right that the default reference pay period to calculate CJRS was that of the pre-coronavirus period for those claiming prior to 31 October.

For the extended scheme from 1 November, the Government appreciates that a minority of employees may have seen an increase in earnings during the pandemic, but others have not, and therefore to be fair to all claimants the default reference pay period for those employees in continuous employment since claiming has remained at the pre-coronavirus period.

For newer employees, it was simply not possible to refer to a pre-coronavirus period, and therefore the reference pay period is necessarily different for this group.

Using the pre-coronavirus reference pay period to calculate the CJRS grant means that it is not necessary to recalculate the basis of the claim for the greatest number of employees and employers.

While a decision for employers to make alone, the terms of the scheme do allow for employers to make a top-up payment should they deem this affordable and appropriate.