Coronavirus Job Retention Scheme facts for kids

The Coronavirus Job Retention Scheme (CJRS) was a special program created by the UK government. It was announced by Rishi Sunak, who was the Chancellor of the Exchequer at the time, on March 20, 2020. This happened during the COVID-19 pandemic in the United Kingdom.

The scheme was designed to help businesses pay their employees when they couldn't work because of the pandemic. It allowed companies to "furlough" staff, meaning employees stayed on the payroll even if they weren't working. The government would then pay a large part of their wages.

Initially, the scheme covered 80% of a staff member's wage, up to £2,500 per month. It started in March 2020 and was planned for three months. However, because the lockdown continued, the scheme was extended many times. It finally ended on September 30, 2021.

What Was the Furlough Scheme?

The Furlough Scheme, officially called the Coronavirus Job Retention Scheme, was a way for the government to help businesses and their employees during the COVID-19 pandemic. It meant that if a business had to close or reduce its work, it could still keep its employees. The government would then pay a big part of their salaries. This helped prevent many people from losing their jobs.

How Did the Scheme Work?

When the scheme first started, it helped businesses pay 80% of an employee's wages. This was up to a maximum of £2,500 each month. The idea was to support companies and workers when many businesses had to shut down or slow down.

Who Was Eligible for Help?

At first, only workers who were on a company's payroll by February 28, 2020, could be part of the scheme. This rule was later changed to March 19, 2020. This change allowed about 200,000 more workers to get help. However, some people who started new jobs just before the scheme began were not able to get this support.

How Much Did It Cost?

The Furlough Scheme was a very large program. Experts thought it might cost around £14 billion every month. By October 2020, the total cost had reached over £41 billion. The government decided to spend this money to stop many businesses from closing and to prevent a huge number of people from becoming unemployed. They wanted to avoid a situation like the 1930s when many people were out of work.

By May 2020, about 8.4 million employees had been furloughed through the scheme. Some companies, like Games Workshop and Taylor Wimpey, later returned the money they had claimed because they didn't end up needing it.

Changes Over Time

The rules for the scheme changed several times. From July 2020, employees could work part-time while still being furloughed. However, employers then had to pay for the hours their staff worked. Also, from August 2020, businesses started paying some of the National Insurance and pension costs for their furloughed staff. These employer contributions slowly increased over time.

Some business groups, especially in hospitality and retail, found these changes difficult. They worried about having to pay more when their businesses were still struggling to reopen fully.

Why Was the Scheme Important?

The Furlough Scheme was very important because it helped protect millions of jobs across the UK. It meant that even when businesses couldn't operate normally, employees could still receive an income. This helped families and the economy during a very uncertain time. It also meant that when businesses were ready to reopen, they already had their staff ready to come back to work.

Making Sure Money Was Used Right

Because the scheme involved a lot of money, there were concerns about how it was being used. Some officials and experts suggested that some money might have been claimed incorrectly. The government worked to make sure the funds went to the right places and were used as intended.