Treasury urged to look again at coronavirus scheme loophole

Rishi Sunak
Chancellor Rishi Sunak
Photo: PA Images

Thousands of people could miss out on furlough payments through the Coronavirus Job Retention Scheme because they started new jobs in the past month.

Only those who were in employment before 28 February are eligible for the scheme; people who changed jobs after this date will not be paid under the plan.

The government has now updated its guidance to address this problem (6 April 2020).

Telegraph Money has claimed that Treasury officials are looking into ways to help people who were caught between jobs in March, but no details have so far emerged. The Treasury did no confirm any such plans with Personnel Today.

The reason for the 28 February cut-off was to prevent fraud – February was the last full month before the lockdown, so the Treasury used the month to gauge people’s salaries when formulating the job retention scheme.

Treasury officials were said to accept that any cut-off date would have serious implications for people between jobs, but have taken the view that not every business or individual job in the country would be saved.

A Treasury spokesman told the Telegraph: “Obviously it’s important to have proof that individuals are connected to the firms that are furloughing them.”

But when asked by Personnel Today about the possiblity of rethinking the rules, an official simply said: “The Coronavirus Job Retention Scheme is aimed at those who would otherwise be unemployed as a result of coronavirus.

“It allows for those who were on the payroll of a company on 28 February but subsequently left to be put back on payroll and furloughed.

“Decisions around whether to offer to furlough someone are down to the individual company.”

As this implies, one route of escape from the loophole is for people’s previous organisations to re-employ them, then furlough them, so that they can receive payments, but few firms so far have agreed to do this.

MPs, including shadow chancellor John McDonnell, have urged chancellor Rishi Sunak to act rapidly to help. Liberal Democrat leader Ed Davey said people were being unfairly “hung out to dry”, with “their dream jobs turning into nightmares”.

BBC News spoke to one woman whose plight was highly representative of the position of several thousand people throughout the UK.

Natalie Greenway, 24, left a job in retail management to start a new role as a customer services manager at a call centre on 16 March.

Greenway, from Burbage, Leicestershire, said: “I got the call from my company saying ‘we’re so sorry, we can’t furlough you’.

“They were really sympathetic and offered to keep me on the books unpaid so I could have a job to go back to.

“I’m staying on the books, I’m not entitled to jobseekers as I am employed.”

The Telegraph highlights the case of Jo Burton, 34, from Kent, who works in events management – among sectors worst affected by the Covid-19 outbreak. She moved jobs at the beginning of March but was made redundant within a week.

“When the government announced its job retention programme my new boss offered to hire me and put me on it straight away, but it then turned out I wasn’t eligible,” she told the newspaper.

Simmons & Simmons employment partner Olly Jones, said the loophole was “something the government was very much aware of at the time its guidance was produced”.

Jones added that what is being referred to as a loophole was “intended as an anti-fraud measure to avoid, in particular, companies employing friends and family and immediately furloughing them. It remains to be seen whether ministers will bow to the pressure to change the position with the significant additional costs and potential for abuse such a change would bring.”

9 Responses to Treasury urged to look again at coronavirus scheme loophole

  1. Avatar
    Jamie kinsley Wilson 4 Apr 2020 at 6:52 pm #

    Dear sirs I am also one of those unfortunate enough Not to have qualified for the furlough and have been dismissed from my job of two weeks in, in March 2020 . Can you please help by giving me the correct department to appeal to this decision . I worked for a reputable company Scottish power and am absolutely devastated i cannot remain their because of Corona . I gave up two weeks of my time which involved training and a full weeks working selling energy for Scottish power, facing the public at a time of uncertainty and then as soon as the government decided I should socially distance my employer had to let me go , not in the 28th February and still not when I began my employment in mid March , they were allowed to take me on and allowed to let me go out and work with the public so why do I miss out and get hung out to dry two weeks into my new job just because the government want to use possible fraud as a loo hole .
    Kind regards
    Jamie kinsley Wilson

  2. Avatar
    Chris Sellers 5 Apr 2020 at 12:31 pm #

    Does anybody know why it was 28/02 and not 29/02 that was chosen as the cut-off date for the Scheme, or did some Whitehall Mandarin not realise it was a leap year?

  3. Avatar
    Tony Wilson 5 Apr 2020 at 1:01 pm #

    I just started with a new employer on the 16th March left my old job on the 13th, emailed my old employer, knew I was wasting my time but swallowed my pride. As anticipated it was a “no we can’t do this”.

    Why would they do this for me after leaving? I left because they didn’t care about their employees.

    I have a new job they would like to furlough me, HMRC have pay slips, I have emails stating my job offer all the proof they need. I have been very lucky as they are paying me 50% of my monthly salary but wonder how long this will last.

    Why has the government created an obstacle in myself having to go cap in hand to my old employer when I have my new employer willing to furlough me.

    The government are putting me out of work, “no one will be left behind”.

  4. Avatar
    ooo 8 Apr 2020 at 1:03 am #

    I in employment on the 28th February but I left in March, is it okay for me to accept furlough payment ?

  5. Avatar
    Steph 8 Apr 2020 at 9:54 pm #

    I’m a teacher and due to leave my current school after Easter to work at an independent school, except they have terminated me before I’ve even started. They can’t furlough me and will re-employ me when schools open. My current school will not keep me on payroll and can’t furlough me either because they are state funded. I’ve never claimed benefits and never been out of work. I’ve been a teacher in Suffolk for 23 years. Now I’m stuffed and never felt so let down. Catching a virus is the last of my worries.

  6. Avatar
    Fernando Leon Ospina arango 9 Apr 2020 at 12:23 pm #

    We must to claim our rights, it wasn’t wrong to choose a new company to improve your earnings and look after your family, we always paid taxes but just because you began your job on March it doesn’t mean the government will not help you, what can we do? Just begging him for rethink again and try to solve this big trouble, please, please help us, this is not our fault and neither yours but we need your help

    Thanks

  7. Avatar
    Janet Allan 14 Apr 2020 at 9:07 am #

    I work last year March to November and started back with the same company in the 5th of March but still miss out

  8. Avatar
    Jan 15 Apr 2020 at 4:16 pm #

    I handed in my notice at my school on 11th March
    I’m unable to start my new job as a Carer as my employer is in isolation for covid19. I am on the payroll for my new job from 6/04/2020. My local authorities will not furlough me nor will my new employer. I’ve worked all my life and paid into the system. I and all the above people have been forgotten about. Please lift that 28/02/2020 cut off
    I’ve no idea what to do!

  9. Avatar
    Rita walker 18 Apr 2020 at 10:10 am #

    Sign “change furlough cut off date to 31.3 ” on change.org

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