The Treasury has extended the coronavirus job retention scheme cut-off date by three weeks, after sustained pressure from workers who were at risk of being laid off across the country.
Under the programme, announced by the chancellor Rishi Sunak last month, employers can claim a grant covering 80 per cent of the wages for a furloughed worker – to a maximum of £2,500 per month.
The Independent reported shortly after the scheme was unveiled, however, that thousands of people who had just started their roles were at risk of losing their jobs due the cut-off date.
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To be eligible for the retention scheme, workers had to have been on their employer’s PAYE payroll on or before the 28 February – three weeks before Boris Johnson announced an unprecedented lockdown to curb the spread of covid-19.
Close to 70,000 people signed a petition urging the government to change the eligibility criteria, describing the cut-off date as a “huge oversight” forcing thousands of workers to rely on universal credit.
But in a statement, published on Wednesday, the government said it would extend the “unprecedented” package to cover those who were on their employees’ payroll by 19 March.
“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 19 March – the day before the scheme was announced,” the Treasury said.
They added: “Employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March.
“This means that the employees must have been notified to HMRC through an RTI [Real Time Information] 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 risk under control and is expected to benefit over 200,000 employees.”
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However, those who were placed on payroll after 19 March are unlikely to qualify and campaigners highlighted that many new starters will still fall through gaps in the scheme.
Posting on social media, Penny Mordaunt, the paymaster general, said she was “sorry it was done sooner”, adding: “This will help more people and is very welcome. Sorry it was not done sooner and know how worried people will have been. Hope to have an update on other Treasury matters sooner”.
Labour’s John McDonnell, the former shadow chancellor who called for the scheme to be altered, said: “This is a victory for all those who campaigned so hard to force the government to act on this.”
BECTU – a sector of Prospect Union – said the change was “welcome”, adding: “The spirit of the scheme is clearly that it should be interpreted as widely as possible and this guidance supports that view.”
“This update alongside the previous decision to allow people to be re-hired, have their contract extended and furloughed will provide reassurance to many of our members who work contract to contract as a PAYE employee. Employers must now act in the interests of the industry and furlough people where they can.”
But, they warned: “There are some who will still not be covered as they don’t have an employer to be furloughed from and those who are self-employed or operate as limited companies who don’t qualify for the Self-employed Income Support Scheme.
“We are working to ensure that no freelancer is left behind during this crisis and will continue to advise government and employers about the best approach to take when interpreting these guidelines and during this fast moving situation.”
Responding to the announcement, Martin Lewis, the founder of Money Saving Expert, posted on his social media account: “While a 20-day deadline shift doesn’t sound much, the Treasury’s extension of the furloughing cut-off date will see 200,000 more people eligible for support form the coronavirus job retention scheme.”
He added: “Though it isn’t a panacea. Some saw their new jobs fall before starting. Others were due to start after that date, or will have been on the payroll too late. And as the furlough is absolutely at employer’s discretion, there will be many who have no work and are eligible who aren’t helped.”
