Martin Lewis blasts HMRC on furlough problem which is ‘technically correct’ but unfair

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Martin Lewis, 48, often knows all the ins and outs of various financial situations and can pick out the best route to take for worried consumers. Unfortunately however, sometimes there is simply no solution for a financial problem and Martin was forced to break this news to a caller today.

Tracy wrote in to ask Martin for his help for her daughter’s problem.

Tracy detailed her daughter started a new full time job in hospitality on October 30, with a signed contract of employment.

She worked every shift until the recent lockdown and had been denied furlough because the payment run for the company isn’t until the seventh day of the month, with her employer saying she doesn’t show on their payroll for furlough because the government cut-off date of October 13, Tracy asked Martin if this was right.

Martin had a sombre reply: “It’s technically correct, it probably isn’t fair, but unfortunately that isn’t the issue your employer does not have a choice, it cannot furlough your daughter.”

He went on to break down the rules that had let to this unfortunate situation: “The rule states you can furlough someone who was on the payroll on the 30th of October, but the legal definition of the payroll, is that the firm has submitted real time information to HMRC on the 30th of October, including your daughter’s name.

“If they haven’t submitted that it’s not whether they’re on the payroll, it’s whether HMRC knows they’re on the payroll and if that isn’t submitted, they can’t furlough.

“It’s to prevent them adding people and furthering them for fraud circumstances after the announcement and your daughter I’m afraid has fallen foul.

“Hopefully if work is still available, they will allow her to continue working. If it’s not, and she has no income she should sign up for Universal Credit.”

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Martin concluded by expressing his frustration and sympathy with this issue while acknowledging little could be done: “We had this in the first lockdown. Thankfully, the cut-off is a bit closer so I think less people will be affected because it came at the end of the month this time.

“But this is what they call the new starter furlough problem, and it’s been a big issue running all year. And there isn’t a solution. I’m sorry.”

Demand for Universal Credit has shot up this year due to economical situations like this.

Fortunately, the government has recognised the importance of state support in the current environment and has adapted their processes to make applying easier and more beneficial.

For instance, in recent months the DWP has suspended minimum income floor rules which allows the self-employed to apply more easily and Universal Credit payments themselves have been boosted.

To be eligible for Universal Credit at all, claimants will need:

  • To be on a low income or out of work
  • To be aged between 18 and state pension age
  • Have less than £16,000 in savings and
  • To be living in the UK

So long as a claimant is eligible, they will be awarded with payments that are tailored to their specific circumstances.

Additional payments will be given for certain living costs such as rent and childcare costs.

While the payments will vary from person to person, there are standard allowances in place which everyone will receive as a minimum and these range between £342.72 and £594.04 per month.

Universal Credit can be claimed by those still in work but the payments will reduce the more a claimant earns.

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