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Extended furlough date of 19 March: but who exactly benefits?
More employees will be able to receive support through the coronavirus Job Retention Scheme (JRS) after the Chancellor extended the eligibility date to 19 March 2020. Individuals originally had to be employed on February 28 2020. However, there will be some employees who started a new job before the 19 March 2020 who still are not covered by the change, meaning their employers will not be able to claim the grant for them.
What was the problem with the original scheme rules?
There was concern that the original 28 February date would mean that people who had started work in February, but who, because of payroll dates (for example, where payday is the 15th of the month) or problems or delays with the operation of the payroll, were not actually paid until after 28th February would not be covered. The date also excluded those who started a new job in March.
Who will the change help?
HMRC say the new deadline will help up to 200,000 more people. However it is important to understand that the actual requirement is that ‘the employee must have been notified to HMRC through a Real Time Information (RTI) submission notifying payment in respect of that employee on or before 19 March 2020’. This means that starting a new job between 1 and 19 March (inclusive) may not be enough.
The Real Time Information system is what employers use to send pay and tax information to HMRC – they must usually do this on or before an employee’s pay date. New starters are notified to HMRC at the same time as their first payroll information is sent through, rather than separately.
Weekly paid employees
What all this means is that if you started work in early March, and are paid weekly, then you are likely to be covered as your employer will have submitted your payroll information at least once to HMRC, as at 19 March 2020 (depending on whether you have to work any weeks in hand).
The problem for (some) monthly paid employees
However, if you started work in March but will not be paid for the first time until the end of March (for example if you are monthly paid and payday is the last working day of the month) then you probably still will not be covered (we say probably as there is a very small chance that your employer may have submitted your payroll information to HMRC earlier than your actual pay date – if it reached HMRC by 19 March 2020, then it could count). This will be the case even if you gave your new employer your P45 or Starter Checklist so that they could set you up on the payroll, ready for your pay date.
The problem for those working for employers without a PAYE scheme
There is another category of workers that may find themselves not covered even where they were paid before 19 March 2020 – workers who work for an employer without a PAYE scheme. This may be because either their employer pays them illegally ‘cash in hand’ or because they are their employer’s only employee, have no other job or income and earn less than £120 a week (£520 a month) – in this (quite rare) situation there is no requirement for an employer to submit payroll information to HMRC (although you should still be given a payslip).
What help is available if I still don’t qualify?
If you still fall through the cracks despite the new cut-off date, and you cannot make any other arrangement with your new employer (e.g. to work reduced hours), then there is the possibility of asking your old employer (where you were still with them as at 28 February 2020) to put you back on their payroll and furlough you. We understand that this has been widely promoted as a potential solution on social media. However, you should be aware that there is no obligation on your old employer to do this. Indeed, as this involves a revival of a legal employment relationship, including all the ‘hidden’ costs and obligations that come with this, it is likely that many ex-employers may not want, or be able to afford, to go down this route.
To the extent that you do not qualify for the any support under the Job Retention Scheme and/or face a much reduced income, then you may need to claim welfare benefits. The benefits system is complex and so we strongly advise that you get some specialist help before making any claims. You should speak to a welfare rights adviser who will be able to go through things in detail with you and help you identify your best options. For detailed guidance, visit our Coronavirus section that we have put together over the last couple of weeks:
Contact: Meredith McCammond (click here to Contact Us)