Question of the week: Should we be using furlough for childcare?

The question this week: Should we be using furlough for childcare?


This has been a point of hot debate recently, and whilst the government updated the CJRS guidance on 5 January to make it clear that those with childcare issues can be furloughed, it’s still necessary to consider the ultimate purpose of the scheme. For this, we turn to the guidance and treasury direction:

  • The latest (5th) CJRS Treasury Direction states that “integral to the purpose of the CJRS” is that the amounts claimed for a particular employee are where the “employment activities have been adversely affected” by coronavirus or related measures to limit/prevent the spread of it.
  • The employer’s CJRS guidance states that if an employer “cannot maintain” its workforce because its “operations have been affected by coronavirus” then the employer can furlough employees and claim under the scheme. This same wording is also used in the ‘step by step guidance’.

It does seem to be a fundamental pre-requisite, before considering whether a particular employee is eligible to be furloughed, that first the employer considers whether its operations have been negatively affected by coronavirus. If they haven’t, and the employer has work for that individual, then the “employment activities” arguably haven’t been adversely impacted by coronavirus and claiming under the furlough scheme could potentially be abuse.

There are harsh penalties in place for abusing the CJRS.

Unless HMRC further clarifies the position, the safest approach for employers would be a 2 stage approach to assessing an employee’s request to be furloughed due to childcare issues:

  • Firstly, is the business struggling to maintain its workforce and/or has its employment activities been adversely affected by coronavirus
  • If yes, but you do have work for the individual requesting furlough, does that individual have caring responsibilities arising from coronavirus? This can include caring for children who are at home due to lack of childcare/schools closing. If yes, the employee can be furloughed.

All of the above can be contrasted with the approach taken to those who are clinically extremely vulnerable. Here, the government’s ‘Eligible employees’ guidance was updated in December to state that “an employer does not need to be facing a wider reduction in demand or be closed to be eligible to claim”.

A much wider approach which seems the opposite to the core purpose of the scheme. However, this wording has not been adopted in relation to those with childcare issues. We can’t necessarily rely on that being a deliberate omission but unless/until the government provides further clarity, employers should approach furloughing employees purely because they have childcare issues, cautiously.


Practical points

From a practical point of view, if an employer feels the core purpose of the scheme hasn’t been met, then work with the employee to consider all options for example, using a childcare bubble (they weren’t available under the guidance in early pandemic days), support bubble (where applicable), seeing if partner/other biological parent can switch around work etc.

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