New Treasury Direction released on flexible furlough scheme

The third Treasury Direction on the furlough scheme has been released, confirming previously known details about the upcoming flexible furlough scheme whilst also clarifying a few areas.

These are some of the key details to be aware of:

  • Organisations can place staff on flexible furlough if they have a qualifying PAYE scheme under the original rules and had made a claim relating to all furlough periods up to June 2020 by end of July 2020
  • Full furlough can continue after 1 July
  • To be furloughed from 1 July, the employee needs to have served a minimum three-week furlough period between 1 March and 30 June except for those who started family leave or reserve forces mobilisation before 10 June and returned after 10 June. Where the employee is a ‘returner’, they must meet all the normal eligibility requirements e.g. on payroll and have a RTI submission made on before 19 March (or 28 February if made redundant and brought back on furlough)
  • Flexible furlough agreements can be agreed in writing (with a signature) or confirmed in writing by the organisation – no signature is needed by the employee but, in this case, agreement should be sought in a discussion beforehand, and the letter just confirms the prior agreement
  • Agreement must be made before the period to which the claim relates, but may subsequently be varied to reflect any variation agreed between the organisation and employee during the period to which the claim relates
  • Although the claim period is generally minimum seven days, there are a couple of instances where it can be less. Permitted periods of less than seven days are called ‘orphan periods’ and include the start or the end of the month which doesn’t fit into a seven-day cycle because claims cannot straddle two calendar months from the end of June into July.
  • There is a maximum number of employees to be furloughed in each claim period – it cannot be higher than the maximum number of people claimed for in any period before the end of June.

The direction also confirms the way that an employee’s usual hours and furlough pay should be calculated. It outlines the proportionate decrease in the maximum cap that can apply to the grant for furloughed hours e.g. if employee is furloughed for 60 per cent of their normal hours, the maximum they can get from the scheme is 60 per cent of £2,500 per month.

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