The government has extended the cut-off date for its scheme to protect furloughed workers’ wages by three weeks.
The Coronavirus Job Retention Scheme allows employers affected by the COVID-19 pandemic to apply for a government grant that covers 80% of each of their employee’s wages, up to £2,500 per month.
It is designed to help businesses refrain from laying off their staff even as the UK economy suffers from the coronavirus lockdown measures.
Initially, in order to qualify for the scheme, employees had to be on a company’s payroll on 28 February this year.
But, following a review, the Treasury has now said the eligibility date has been extended to 19 March – the day before the scheme was announced by Chancellor Rishi Sunak.
The action follows pressure from people who complained they could not benefit from the scheme because they switched jobs just before the coronavirus crisis.
Business groups had also been putting pressure on ministers, saying their members have to decide by 18 April if they can keep staff on their payroll beyond the end of May.
This is because employment law requires companies to declare a 45-day consultation period for mass redundancies.
The Treasury expects 200,000 employees will benefit from the date change, while also “keeping the substantial fraud risk under control”.
The scheme is expected to be fully operational next week.
Money Saving Expert founder Martin Lewis said that some people will still not be covered by the scheme it only impacts those whose new companies sent HMRC what is known as an “RTI submission” notifying them the employee is on their books now.
He explained: “This can be done at any time between pay days, but typically up to a week before the payroll sate.
“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.”
Sky News political correspondent Rob Powell added: “Many who are paid at the end of the month will still miss out as it’s unlikely the employer will have sent the info off in time.”
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Cabinet Office minister Penny Mordaunt, who is the paymaster general, said she was “sorry” the date change was “not done sooner” because of “how worried people will have been”.
“This will help more people and is very welcome,” she said.
Despite emergency economic measures brought in by Mr Sunak to support the UK economy during the coronavirus crisis, the Office for Budget Responsibility published a scenario on Tuesday in which the UK’s economy could shrink by 35% and unemployment could jump by two million due to the pandemic.
On the same day, Mr Sunak repeated his warning that the government will not be able to protect every business and household during the coronavirus outbreak, admitting: “These are tough times and there will be more to come.”