FIRST PRESS RELEASE [20TH APRIL]
“Misleading” job retention scheme update will help less than 5% of those affected.
An estimated 1.5 million people due to start a job after February 28 will not be eligible for the Coronavirus Job Retention Scheme—despite a recent government change extending the cut-off date to March 19.
The government claimed this new date would make 200,000 people eligible for furlough under the scheme. However, research by campaign group New Starter Justice and polls carried out by money expert Martin Lewis show that the majority of new starters will not be helped by this change.
The government changed the fine print of the scheme to include anyone on their employer’s PAYE payroll on or before 19 March 2020, as determined by Real Time Information (RTI) submitted to HMRC on or before this date. But 95% of respondents to an internal poll by New Starter Justice said that they would not be eligible for furlough even with the amended cutoff date. A poll carried out by Martin Lewis found that most companies (92%) submit RTI 1-10 days before payday—which is at the end of the month for the majority (70%). So even employees who started a job before 19 March—in some cases, as early as February—are unlikely to appear in payroll data until after this date.
New Starter Justice has described the latest amendment as a “smoke screen” and has pledged to keep fighting for those excluded by the scheme. In a statement, the campaign group called upon the government to “amend eligibility criteria for the Job Retention Scheme to include the thousands of new starters that were not on payroll with their new company on the 19th March, but had a contractual commitment with them.” Campaigners also expressed concern that the extension of the scheme—now due to end in June—would leave new starters without income for another month, but expressed hope that a longer scheme would give the government more time to make crucial changes to it.
The Coronavirus Job Retention Scheme was initially proposed with a cutoff date of 28 February. Thousands of new starters have been left without income as a result of this date, and had their job offers withdrawn or postponed, because their new employers cannot claim their furlough pay from the government.
Natalie Greenway, a New Starter Justice organiser, said: “The April 15 update on the Coronavirus Job Retention Scheme was a smoke screen being sold as a solution for thousands. The amendment of the cut-off date was welcomed by the New Starter Justice Campaign but the addition of the RTI submission requirement has rendered this victory mute for the majority of campaigners. As referenced by Martin Lewis, the majority of businesses complete their RTI submissions 1-2 days before payroll; and as the most common pay date in the UK is month end, many new starters had not been registered with HMRC prior to the 19th.
“Whilst we appreciate that this amendment to the CJRS will have helped a small proportion of new starters, the changes have simply not gone far enough. There are too many people being left to fall through the cracks in the support scheme set out by Rishi Sunak and the Treasury.
“The government’s statistic claiming 200,000 workers have now been made eligible is misleading. We would like to know what this figure is based on.
“Our demand is clear. The government must amend eligibility criteria for the Job Retention Scheme to include the thousands of new starters that were not on payroll with their new company on the 19th March, but had a contractual commitment with them. Evidence can be submitted to HMRC for scrutiny in order minimise the possibility of fraudulent claims.”
SNP Westminster leader Ian Blackford initially tweeted: “this will make a massive difference to many” as a first reaction to the scheme. However just 4 hours later he conceded that “the announcement on retention is not what it is cracked up to be.”
Virendra Sharma, Labour MP for Ealing Southall, called for Chancellor Rishi Sunak to amend the scheme: “I still haven’t heard back from you on #newstarterfurlough [sic] They have worked and paid taxes but through no fault of their own are being let down. You said no one left behind—make that true.”
Martin Lewis said: “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’ve been on the payroll too late. And as furlough is absolutely at an employer’s discretion, there will be many who have no work and are eligible who aren’t helped.”
Reporting on the New Starter Justice campaign for Channel 4, Jackie Long said:
“The government argued an additional 200,000 people would now be eligible for the furlough scheme. Experts say that number simply cannot be correct. Tens and tens of thousands will still be excluded.
“So many of the people who aren’t eligible for this scheme are people who have always worked, always paid their taxes and who had always done the right thing”