10,000s more employees eligible for furlough as cut-off date extended to 19 March
Tens of thousands of employees who've recently started a new job and thought they'd missed out on being furloughed are now likely to be able to get support through the Government's Coronavirus Job Retention Scheme, after the eligibility date was extended to 19 March 2020. But the move won't help everyone and is unlikely to aid 200,000 employees, as predicted by official estimates.
Under the scheme, which was unveiled last month, employers can put employees on furlough (a bit like a standby mode) – that's where they don't work, and the state finances 80% of their salary up to £2,500/month. Employers can top this up to 100%, but are not required to. Full info is in our Employment Coronavirus Help guide.
When the scheme was first announced, individuals had to be employed by the firm furloughing them on 28 February 2020, but the Government has extended the eligibility date to 19 March – the day before the scheme was announced.
The extension means employers can now claim for furloughed employees that were on their PAYE payroll on or before 19 March – so those who've recently started a new job and weren't on the payroll by 28 February but were by 19 March will get help.
However, there's a technical caveat here – it's likely you need to actually have been paid at least once by your employer by then. This is because your employer needs to have made a payroll submission about you to HMRC on or before 19 March. We say it's likely you'll need to have been paid as it's possible your company could have made a payroll notification to HMRC before the cut off, even if your first salary payment came after.
If an employer is considering rehiring a former employee in order to furlough them, the cut-off date remains 28 February, so you'll need to have been on the payroll at that point.
Some firms have got in touch to say they’ve had conflicting guidance around whether they can rehire and furlough an ex-employee when the employee has left their firm after the 19 March. We're checking with the Government and will update this story when we hear back.
For more info on how this scheme works, see the key need-to-knows about furlough.
'This is likely to help 10,000s – but it's far from a panacea'
Responding to the announcement, Martin Lewis, founder of MoneySavingExpert.com, said: "While a 20-day deadline shift doesn't sound much, the Treasury's extension of the furloughing cut-off date will, according to the Government, see 200,000 more people eligible for support from the Coronavirus Job Retention Scheme. Furloughing is where the state covers 80% of employees' salaries, up to a maximum of £2,500/month – for those with no work, or who can't work due to coronavirus.
"First announced on 20 March, it only applied to those on payrolls on 28 February. That left those who'd shifted jobs in between those times – taking advantage of our flexible labour market – left out with no support, simply by a misfortune of timing. The new cut-off date is for those employed and on the PAYE payroll by 19 March 2020.
"To count, the employee must've been notified to HMRC through an RTI submission – this can be done at any time between pay days, but typically up to a week before the payroll date. That means those who'd started work and been paid by 19 March are definitely eligible – for those who hadn't, it's in the balance.
"This is the second change impacting the same group of people. Two weeks ago, I got the Government to change guidance to explicitly permit those who'd left jobs to work elsewhere after the cut-off to be rehired and furloughed by their former employers.
"As expected, some former employers have generously agreed to do this, while most haven't. Now, thanks to pressure from the very vocal 'new starter furlough' group of those affected, we see this much bigger change, meaning many more people are eligible to be furloughed by their new employers.
"Though it isn't a panacea – it's likely far less than the 200,000 official number eligible will actually be helped. Some saw their new jobs fall through before starting. Others were due to start after that date, or will have been on the payroll too late. And as furlough is absolutely at the employer's discretion, there will be many who have no work and are eligible who aren't helped.
"However, the Treasury should be applauded for breaking with its initial stance and showing a real flexibility. Sources there had been firm that it was very unlikely to change any of its initial announcements, only tweak guidance.
"My suspicion is the dire economic forecasts by the Office for Budget Responsibility yesterday meant they had to take another look to close some of the gaps in the system. This move should probably light a dim flame of hope in others who feel unjustly unsupported, such as limited company directors and new starter self-employed."
What does the Government say?
In a statement posted on the Gov.uk website, the Treasury said: "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.
"HMRC have been working at pace to deliver the scheme, which is due to be fully operational next week."