Furlough rule tweak will see 200,000 more workers eligible for financial support
Thousands more employees will come under the scope of the Coronavirus Job Retention Scheme as the eligibility date has been extended from the original 28 February to 19 March 2020, the government has confirmed.
This means staff on any type of contract (including those on zero-hours or temps), who were on a firm’s PAYE payroll on or before 19 March can be furloughed and may be eligible for the financial assistance.
Under the coronavirus grant scheme, businesses can apply to cover most of the wages for people who are furloughed and not working, in a bid to prevent job losses.
It provides up to 80% of salaries, up to a maximum of £2,500 a month but employers can top-up salaries further.
Originally when the Chancellor announced the scheme on 20 March, only those who had been employed on or before 28 February were eligible.
But there was a lot of criticism from those who started new jobs after this date who weren’t eligible and who may not have been lucky enough to go back on their previous employer’s books, as the decision is down to the employer’s discretion.
In updated guidance published today, it states: “Following a review of the delivery system and to ensure the scheme helps as many people as possible, new guidance published today has confirmed the eligibility date has been extended to March 19 2020 – the day before the scheme was announced.
“Employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020. This means that the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020.
“This change makes the scheme more generous while keeping the substantial fraud risks under control and is expected to benefit over 200,000 employees.”
However, one draw back to the extension is that not everyone employed by 19 March will be brought into the scheme, Sarah Coles, personal finance analyst at Hargreaves Lansdown explains.
“You also have to have been on your new employers’ payroll – and HMRC must have been notified of it by this date. If your employer usually notifies HMRC of changes at the end of each month, you would have had to have started by the end of February to qualify,” she said.
The Coronavirus Job Retention Scheme is due to be fully operational next week, the government also confirmed.
See YourMoney.com’s Everything you need to know about being furloughed for more information.