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New Treasury Direction on Furlough Leave Grant

New Treasury Direction on Furlough Leave Grant
Richard Hiron Jan 27,2021
blog post

HM Treasury has published a new Treasury Direction (the sixth) on the Coronavirus Job Retention Scheme (a.k.a. furlough leave).

This new Treasury Direction amends and supersedes the previous Direction published in November 2020, although they still need to be read together, which becomes clear upon reading them. However, the basic principles of the application of the furlough grant as we know it remain the same: the main changes are to dates.

In essence, the latest Direction formally confirms that furlough leave has been extended from February 2021 until 30 April 2021.

Importantly, the new Direction clarifies that, for those employees who are not paid a fixed rate, the appropriate reference periods for calculating the level of the furlough grant to be paid in March 2021 and April 2021 are March 2019 and April 2019 respectively. This is due to the fact that many employees were placed on furlough leave in March 2020 and April 2020, which would expose those employees to the risk of their pay being reduced to less than 80% of their normal pay if it were based on previous furlough pay.

Again, it is vital for employers to note that the furlough grant cannot be applied to those employees either on notice of the termination of their employment, taking an unpaid sabbatical or other unpaid leave between 1 February 2021 and 30 April 2021. Equally important is the fact that the furlough grant cannot be applied towards making a redundancy payment.

There have also been updates to the deadlines for submitting and/or amending claims:-

Deadlines for Submitting Furlough Claims

Furlough Claim Period             Claim must be submitted by       
February 2021 15 March 2021
March 2021 14 April 2021
April 2021 14 May 2021


Deadlines for Amending Furlough Claims

Furlough Claim to be Amended       The proposed amendments must be submitted by      
February 2021 29 March 2021
March 2021 28 April 2021
April 2021 28 May 2021