Martin Lewis comments on newly announced furlough rules providing a ‘dim flame of hope’

Martin Lewis is welcoming new changes made by the government today. Under the Coronavirus Job Retention Scheme, companies could receive help for covering employees’ wages while they were placed on furlough.

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Originally, the scheme only covered people who were on a company’s payroll before February 28.

This meant that many employees, through no fault of their own, would not be able to benefit from the new system.

Fortunately, the government has changed that cut-off date to March 19.

That may seem like a relatively small tweak but the Money Saving Expert highlighted just how impactful the change will be: “While a 20-day deadline shift doesn’t sound much, the Treasury’s extension of the furloughing cut-off date will see according to the government 200,000 more people eligible for support from the Coronavirus Job Retention Scheme.

“Furloughing is where the state covers 80 percent of employees’ salaries, up to a maximum of £2,500/month – for those with no work, or who can’t work due to coronavirus.”

It should be noted that this particular scheme is only for people on PAYE payrolls, with a separate scheme available for the self-employed.

To be eligible for this scheme, the employee must be notified to HMRC through what is known as a RTI submission.

While the new scheme is undoubtedly helpful, there have been a few teething issues that Martin has actively been working to change.

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As he continued: “This is the second change impacting the same group of people.

“Two weeks ago, I got the government to change guidance to explicitly permit those who’d left jobs to work elsewhere after the cut-off to be rehired and furloughed by their former employers.

“As expected, some former employers have generously agreed to do this, while most haven’t.

“Now, thanks to pressure from the very vocal ‘new starter furlough’ group of those affected, we see this much bigger change meaning more many people are eligible to be furloughed by their new employers.”

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The overall system still isn’t perfect, as Martin theorised that only a portion of the 200,000 affected will actually get help.

He highlighted that furloughing staff is still at the discretion of the employer and there are many reports of workers struggling with their employers throughout this period.

Despite this, Martin commends the Treasury’s efforts: “The Treasury should be applauded for breaking with its initial stance and showing a real flexibility.

“Sources there had been firm that it was very unlikely to change any of its initial announcements, only tweak guidance.

“My suspicion is the dire economic forecasts by the Office for Budget Responsibility yesterday meant they had to take another look to close some of the gaps in the system.

“This move should probably light a dim flame of hope in others who feel unjustly unsupported, such as limited company directors and new starter self-employed.”

Up to date information and guidance on furlough rules can be sought from the government’s website or impartial organisations such as the Money Advice Service or Citizens Advice. 

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