The COVID-19 pandemic has resulted in an unprecedented response and economic support package from the UK Government. 

This response includes a Job Retention Scheme which supports businesses who cannot economically continue to employ some or all of their workforce. 

The Government's primary response has been to encourage employers to furlough eligible staff

Jump links:

• What is furloughing? 
• The cycle to work scheme and furloughed employees
• What is a payment holiday?
• Can I apply for the cycle to work scheme if I am furloughed?

What is furloughing? 

This allows employers to keep employees on their payroll and avoid redundancy. The Government is then funding a portion of those workers’ salaries to ensure they can maintain an adequate standard of living and meet their financial obligations.

The cycle to work scheme and furloughed employees:

Recent Government updates on furloughing have confirmed that no part of the grant should be used to pay for the provision of the cycle to work scheme. The majority of employees are therefore likely to be offered a payment holiday for their benefits (including cycle to work).

What is a payment holiday?

The salary sacrifice temporarily stops. This would mean there is a 'payment holiday' on the value of the salary sacrifice for the period an employee is furloughed. 

Covid-19 is being classed as a life event, this means that it is entirely acceptable for employers to apply a payment holiday to outstanding salary sacrifice payments during the period of furloughing.

Where this occurs, the employer and employee should mutually agree on this course of action and amend the terms of their employment as is appropriate.

Can I apply for the cycle to work scheme if I am furloughed?