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Furloughed worker scheme
First problem: some employers are telling their workers that they will designate them as furloughed but cannot afford to pay the wages until they get the money from the govt. Obviously this is not in line with the scheme where the employer will be refunded 80% of wages that it has paid.
Second problem: some workers are finding the employer is taking time over making any decision re joining the scheme and they still don’t know if they will be furloughed or not.
Third problem: some workers want to know if they can take another job during the period for which they are furloughed. The scheme clearly states a worker cannot work for the employer which designates them as furloughed - but can they work for another employer?
First and second problems both raise the question whether workers can claim UC in this situation. I note the govt has now amended the UC page https://www.gov.uk/universal-credit/how-your-earnings-affect-your-payments so that it now has a section about furloughed workers. But it offers no help at all - although interestingly it doesn’t outright say that workers CANNOT claim UC.
Does anyone have any information?
I think it has been taken as a given that some employers would not have the funds to continue to pay employees until the Government Grant comes through and that employees will, not receive pay due, therefore they can claim UC until such time as they receive any payment from employer. There has been nothing specifically said by the Government that an employer will still not be eligible for the JRS grant if they haven’t paid the employees but I can understand why some people may err on the side of caution but the intention of the Government is to keep the employees in a job and pay this level of wages as otherwise the employer would just close down.
The most recent guidance issued by HMRC as highlighted in the other “furlough” threads covers another/new job.
https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
While you’re on furlough
If your contract allows, you may undertake other employment while your current employer has placed you on furlough, and this will not affect the grant that they can claim under the scheme. You will need to be able to return to work for the employer that has placed you on furlough if they decide to stop furloughing you, and you must be able to undertake any training they require while on furlough. If you take on new employment, you should make sure you complete the starter checklist form with your new employer correctly. If you are furloughed from another employment, you should complete Statement C. Any activities undertaken while on furlough must be in line with the latest Public Health guidance during the COVID-19 outbreak.
Thank you for the swift reply. Is this your guess at to what the government intends or are you able to confirm that this is the official view?
Sorry I meant to say in relation to the claim for UC. I ask because the UC site doesn’t seem to say this in the section on furloughed workers. Your guidance on second jobs is helpful and also similar to the position which most people I’ve discussed it with have suggested.
Universal Credit is universal. Anyone can claim it, whether they are unemployed, employed and in full time work or furloughed. Their wages will just be input into the calculation to determine what is paid.
I don’t see how a furloughed worker could be any worse off by claiming UC. If they put in their claim and get to the end of the first AP without having received any wages for that period, then I imagine their full entitlement would be paid. The worst case scenario is then that their wages for that period are then paid at a later date and “backdated” to when they ought to have been paid on the RTI feed which would then create an overpayment they would need to pay back.
Yes that was what I thought would be the position and would be on a par with S/e scheme. But as I understand the govt has been asked by several charities to confirm whether a furloughed worker could apply for UC and so far has not replied.
I have a client who is in the situation in ‘First Problem’ - i.e. they have been furloughed but their employee does not have the funds available to pay those furloughed staff until the grant comes through. Best guess is they cannot even claim it until the end of this month according to https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme so it is likely at least a month if not longer until they see any wages.
However, my client is also entitled to SDP on their Housing Benefit. So they cannot/should not claim UC. Can they claim JSA instead? CPAG book suggests this may be difficult as they are still employed and there is therefore a question mark of whether they are really available for work. Although, they do work part-time so that could be worth an argument as they could argue they’d be available to work at other hours. Complication is, if they were unemployed they’d want to be arguing for part-time work anyway due to their health, so again are they really available? If we didn’t mention the need to work part-time and then her current employer decided to make her redundant instead, we could then have a problem convincing the work coach to accept her then needing to only work part-time.
Maybe they could get a sick note and claim ESA instead. But then, if they are sick, they should be getting SSP from their employer instead, and therefore shouldn’t get ESA (their earnings are higher than the SSP threshold).
(Maybe I am overthinking this!)
However either way I would assume that once the wages do come through, their whole benefit claim will have been overpaid. They will have the funds to pay that off, technically, with their wage backdate, but I think my client will want to avoid this, so in explaining that I think I may have difficulty convincing them to apply for either benefit. It would also potentially create a lot of work for me to in order to support them with all of the intricacies of whether either or both claims should be allowable.
Meanwhile they are in financial hardship.
Thoughts?
By the way - I am certain a furloughed worker can claim UC (except where they get SDP!). Workers can claim UC so I don’t see where the issue would lie. Within that claim would be questions of - what are you earning, reported via RTI; and - what jobseeking requirements should you have - of which jobcentres have said they will make less requirements of and they have a large amount of flexibility over.
[ Edited: 7 Apr 2020 at 09:07 am by Elliott S ]CV Further Measures Regs (SI 371) from 30.3.20 give decision-makers discretion to take sensible decisions - is the guidance on how they intend to use these powers available yet?
2.—(1) The Secretary of State may, where it appears expedient as a consequence of the outbreak
of coronavirus disease, and in such cases or class of case, or for such period, as the Secretary of
State determines—
(a) treat the amount of the individual threshold or the couple threshold in regulation 62
(minimum income floor) of the Universal Credit Regulations(b) as if it were a lesser
amount (including zero);
(b) where it falls to be determined whether a claimant is in gainful self-employment, delay
that determination;
(c) where it has been determined that a claimant is in gainful self-employment, treat that
claimant as not being in gainful self-employment;
(d) where a claimant is in a start-up period, extend that period for as long as the Secretary of
State considers appropriate; or
(e) in relation to any claimant who would otherwise fall within section 22 of the Welfare
Reform Act 2012 (all work-related requirements) as a result of this regulation, except
that claimant from a work search requirement or a work availability requirement.
(2) In this regulation “start-up period” and “gainful self-employment” have the meanings given in
regulations 63 and 64 respectively of the Universal Credit Regulations.
In response to Elliot S, have you checked WTC entitlement for your client? If they are excluded from UC by the SDP gateway they should be able to make a claim for WTC.
You mention that they work part-time, but if they satisfy the disability criteria they would only need to be doing 16 hours to get WTC. My hope would be that a WTC claimant will still be treated as ‘normally’ working their usual number of hours during a period of furlough.
The other option to consider is that your client could possibly be better off claiming UC, if you think they will pass the WCA. Remember that working is no barrier to having LCW/LCWRA assessed under UC if you get PIP, and if you have LCW/LCWRA status you get the earnings disregard under UC.
Just a couple of things to consider.
CV Further Measures Regs (SI 371) from 30.3.20 give decision-makers discretion to take sensible decisions - is the guidance on how they intend to use these powers available yet?
The DWP have released ADM Memo 04/20 which discusses the Further Measures Regulation (SI 371): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878189/adm4-20.pdf
There’s no guidance as to how the discretion is to be exercised. Only that there is discretion…
Paragraph 7 of ADM Memo 04/20, regarding standard allowance amounts, states: The amounts for the purpose of any case affected by these further measures are to be read as if they were [...]
SI 371 states: 3.—(1) Regulation 36 (table showing amounts of elements) of the Universal Credit Regulations, as amended by article 33 of, and Schedule 13 to, the Social Security Benefits Up-rating Order 2020(1) (“the 2020 up-rating order”) is to be read as if the following amounts were substituted for the amounts of the standard allowance [...]
Does this mean that all Universal Credit awards are affected by the Further Measures Regulation (SI 371) and benefit from the increased standard allowances?
I think it has been taken as a given that some employers would not have the funds to continue to pay employees until the Government Grant comes through and that employees will, not receive pay due, therefore they can claim UC until such time as they receive any payment from employer. There has been nothing specifically said by the Government that an employer will still not be eligible for the JRS grant if they haven’t paid the employees but I can understand why some people may err on the side of caution but the intention of the Government is to keep the employees in a job and pay this level of wages as otherwise the employer would just close down.
Not sure why (or that) it’s taken as a given that employers will not have the funds to pay their employees. One of our clients recently received a small business grant of £10,000 to meet ongoing costs. They do not have staff to pay. They will also be entitled to the Self Employed Income Support Scheme.
An employer should be able to avail themselves of one of these many sources of help:
in order to continue to pay those staff it has furloughed, if the employer has chosen to do this.
It is surely unacceptable that the burden falls on furloughed staff (if they have been furloughed) to claim an alternative income while they continue to operate under their contract of employment (albeit one that has been slightly amended).
I’m pretty pragmatic, usually, but this is really getting my goat….
However, my client is also entitled to SDP on their Housing Benefit. So they cannot/should not claim UC. Can they claim JSA instead? CPAG book suggests this may be difficult as they are still employed and there is therefore a question mark of whether they are really available for work. ..
Pre UC, laid off workers could claim JSA while they were laid off without pay from their normal job. Being already formally under a contract of employment shouldn’t in itself prevent you seeking other temporary work.
In some cases, showing you are a jobseeker is a prerequisite for claiming PPI towards your mortgage etc.
I think it has been taken as a given that some employers would not have the funds to continue to pay employees until the Government Grant comes through and that employees will, not receive pay due, therefore they can claim UC until such time as they receive any payment from employer. There has been nothing specifically said by the Government that an employer will still not be eligible for the JRS grant if they haven’t paid the employees but I can understand why some people may err on the side of caution but the intention of the Government is to keep the employees in a job and pay this level of wages as otherwise the employer would just close down.
Not sure why (or that) it’s taken as a given that employers will not have the funds to pay their employees.
Hence why I said “some”.
There are many small employers, run by everyday people not multi-millionaires, that run on a very small income levels with no personal savings to be able to subsidise their business.
There are many small employers, run by everyday people not multi-millionaires, that run on a very small income levels with no personal savings to be able to subsidise their business.
But i think that’s the point- it *seems* to be relatively easy for small business owners to access the funding. I know one recipient of the £10k business grant who is a taxi driver. There should be no need for an employer to use personal savings to pay staff.
Obviously, there are a lot of shoulds and musts here….
Does this mean that all Universal Credit awards are affected by the Further Measures Regulation (SI 371) and benefit from the increased standard allowances?
The increased allowances are a general increase which replaced the previously announced inflation linked increases. All UC claimants benefit.
In response to Elliot S, have you checked WTC entitlement for your client? If they are excluded from UC by the SDP gateway they should be able to make a claim for WTC.
You mention that they work part-time, but if they satisfy the disability criteria they would only need to be doing 16 hours to get WTC. My hope would be that a WTC claimant will still be treated as ‘normally’ working their usual number of hours during a period of furlough.
The other option to consider is that your client could possibly be better off claiming UC, if you think they will pass the WCA. Remember that working is no barrier to having LCW/LCWRA assessed under UC if you get PIP, and if you have LCW/LCWRA status you get the earnings disregard under UC.
Just a couple of things to consider.
Thanks AlexJ. I neglected to mention she is already getting WTC.
I don’t think she can claim UC due to the SDP though? Or at least she *shouldn’t* be able to…
However, my client is also entitled to SDP on their Housing Benefit. So they cannot/should not claim UC. Can they claim JSA instead? CPAG book suggests this may be difficult as they are still employed and there is therefore a question mark of whether they are really available for work. ..
Pre UC, laid off workers could claim JSA while they were laid off without pay from their normal job. Being already formally under a contract of employment shouldn’t in itself prevent you seeking other temporary work.
In some cases, showing you are a jobseeker is a prerequisite for claiming PPI towards your mortgage etc.
Thanks Jon. I should be reassured JSA ought to be an option for her then.
Although thinking about it, this opens up the WTC/JSA circular paradox…
I think it has been taken as a given that some employers would not have the funds to continue to pay employees until the Government Grant comes through and that employees will, not receive pay due, therefore they can claim UC until such time as they receive any payment from employer. There has been nothing specifically said by the Government that an employer will still not be eligible for the JRS grant if they haven’t paid the employees but I can understand why some people may err on the side of caution but the intention of the Government is to keep the employees in a job and pay this level of wages as otherwise the employer would just close down.
Not sure why (or that) it’s taken as a given that employers will not have the funds to pay their employees. One of our clients recently received a small business grant of £10,000 to meet ongoing costs. They do not have staff to pay. They will also be entitled to the Self Employed Income Support Scheme.
An employer should be able to avail themselves of one of these many sources of help:
in order to continue to pay those staff it has furloughed, if the employer has chosen to do this.
It is surely unacceptable that the burden falls on furloughed staff (if they have been furloughed) to claim an alternative income while they continue to operate under their contract of employment (albeit one that has been slightly amended).
I’m pretty pragmatic, usually, but this is really getting my goat….
Thanks for the link. I will suggest to my client she provides this info to her employer. Seems to me they should be able to claim one of those grants
[ Edited: 8 Apr 2020 at 10:51 am by Elliott S ]Hi Elliott S,
That’s true, you’re right in saying that the client shouldn’t be able claim UC because of the gateway. I’m so used to helping people avoid UC where possible, because they’re so often worse off, that I overlooked the fact that in some circumstances the regs won’t actually allow you to claim UC, even if you want to.
Cheers
Alex
[ Edited: 9 Apr 2020 at 01:50 pm by AlexJ ]Updated guidance from yesterday,
Main aspect is that you had to be on PAYE by 19th March now rather than 28th February. There must have been an RTI submission by employer by 19th March so it is possible that not everyone who has started in March or potentially later stages in February will qualify as it comes down to when employer sent RTI re wages.
“This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.”
I think this might exclude a lot of monthly paid staff!!
Article from LITRG that gives more info about the Job Retention Scheme based on new information provided by HMRC and LITRG’s own experiences of testing the calculator and the system -
Five things that are now clearer about the Job Retention Scheme (and five things that are not)
I’m glad that the scheme has been extended, as of today. The situation seems to have been made complicated for nurseries though by the government limiting access to the scheme for them. See this link: https://www.daynurseries.co.uk/news/article.cfm/id/1624603/nurseries-huge-shock-government-limits-access-furlough-scheme
[ Edited: 12 May 2020 at 04:31 pm by Kurtk ]