The furlough scheme has been championed as protecting millions of jobs across the UK since it was introduced at the start of the Covid pandemic.
The initiative, officially known as the Coronavirus Job Retention Scheme (CJRS), has paid 80% of some employees' salary up to £2,500 a month for hours not worked throughout the coronavirus crisis.
The scheme is UK wide, meaning businesses in Scotland, Wales and Northern Ireland as well as England, can access furlough support during lockdowns, following calls for clarity from First Minister Nicola Sturgeon.
Has furlough been extended?
The furlough scheme has been extended until the end of September by Mr Sunak on the eve of his 2021 Budget address.
The furlough scheme will continue to pay 80% of employees' wages for hours they cannot work during the pandemic.
Yet from July employers will be required to contribute to the scheme if they want to keep workers on furlough.
Employers will be expected to contribute 10% of wages in July, rising to 20% in August and September.
"Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK," said Mr Sunak.
"There's now light at the end of the tunnel with a roadmap for reopening, so it's only right that we continue to help business and individuals through the challenging months ahead - and beyond."
Labour said the changes to support schemes could have been made months ago to protect jobs and livelihoods.
When was furlough due to end?
The government's furlough scheme was scheduled to end on 30 April 2021 - more than a year since it was first introduced as a way of avoiding mass redundancies due to the virus.
The scheme has been used by employers in all four UK nations, with around 930,000 people in Scotland on furlough during the first peak of the virus in the spring and summer of 2020.
It has come at a heavy price to the UK public purse, however, with the complete support package costing in the region of £200 billion, including additional tax deferrals and grants for businesses.
What has Nicola Sturgeon said about furlough?
Scotland’s First Minister underlined the importance of the furlough scheme and said discussions with the UK government were ongoing, with finance secretary Kate Forbes making representations to chancellor Rishi Sunak.
Ms Sturgeon also said that support for workers and employers was needed “for as long as is necessary” and that there might be slight differences in the timescales between England and Scotland as each nation plots a route out of Covid restrictions.
Who can be placed on furlough?
All employees - be it full time, part time, agency, flexible or zero hour contracts - can be placed on furlough, as long as the individual was on the company's books before the scheme was last extended.
Those employees furloughed are often people who cannot do their jobs because their workplace is closed, there is not enough work for them, or they can't do their jobs due to impacts of the virus elsewhere in the supply chain.
Employees maintain their worker rights, such as annual and parental leave, and individuals can take on other jobs as long as it doesn't break the rules of your contract with your main employer.
Parents and carers with responsibilities, as well as clinically extremely vulnerable workers who cannot leave their homes, are also eligible to be placed on furlough, and are advised to speak to their employer.
Workers can be brought off furlough part time or completely when their employer deems it necessary, leading to a restructuring of payments made from the government in reflection of hours worked.
Has furlough been extended before?
The furlough scheme has been extended before as the virus maintained its grip on society throughout 2020, meaning some businesses couldn't open, reopen fully or had to close again due to government guidance.
It was last extended on 5 November in response to high infection rates and an increasing number of people in hospital with Covid, with the chancellor of the exchequer Rishi Sunak outlining the reasons why.
He said: ”I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK - and that has meant adapting our support as the path of the virus has changed.
“It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support.
“Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”