Human Resources: Federal Cabinet adopts social protection package

06/05/2020

Short-time working allowance:
Here a new draft of a law was already in place, which was adopted on 13.03. with retroactive effect from 01.03.2020. If companies order short-time work due to the global sickness caused by the corona virus and this results in loss of earnings, affected employees can receive short-time work compensation. This benefit must be requested by the employer.
A precondition for receiving short-time working compensation is that the normal working hours are temporarily reduced significantly – i.e. at least 10% of the working hours of 10% of the workforce. A number of other conditions must be met. In this case, employees can have approx. 60% of their previous net income – or 67% if they have children – reimbursed tax-free by the Federal Employment Agency. This option should help to avoid unemployment for a lot of employees.
An employer have to apply for this option and must pre-finance the payment. Reimbursement by the Federal Agency will then be made approximately 30 days after the application is submitted.
Reduced offsetting of remuneration from additional work against short-term employment
Since certain industries and professions are indispensable for public life, security and the supply of people in the current crisis, the government wants to ensure that sufficient labour is available in this systematically relevant areas; particularly referring to the health sector with hospitals and pharmacies, but also to agriculture and food suppliers.
Insofar, to create an incentive to take up temporary activities in this sectors, remuneration from any other employment taken up in the short-time work period is not taken into account to be credited against short time allowances.

Facilitated access to child supplement
In many families, income is currently being reduced by short-time work or unemployment benefits. In order to mitigate the consequences, the child benefit supplement is to be temporarily redesigned in a way that it reflects the current crisis-related living situation for families claiming the benefit. Its calculation is based on the income of the last month before the demand has been made and private asset will temporarily not be considered for the calculation. In the past, the families have to use their privat assets completely, before the get a claim on this supplement.
Those who earn little and do not receive unemployment benefit II will receive a supplement to child benefit under certain conditions. The family fund pays up to 185 euros per child as a child supplement per month. The child supplement is available from a monthly income of 900 euros, for single parents from 600 euros.

Maximum periods of minor employment contracts will be extended
In order to take account of problems in seasonal working due to the Corona crisis, particularly concerning the agricultural sector, the time limits of short-term employment can be extended to a maximum duration of five months or 115 days, starting with the 1st of March until the 31st of December 2020.

Legal exceptions will foresee less restricitve limits of working hours
Temporary regulations in German labour law through the period of Corona-crisis shall be introduced to authorise extended working hours; in order to help maintaining public and systematically relevant services.

Limits of additional income of pensioners resuming a job are extended to achieve greater exemption
To facilitate working or resume employment after retirement current German law still provided too strong restrictions if any income is earned in addition to the pension.
Higher exemption could now support those who want to help in the current situation: in 2020, 44,590 instead of the previous EUR 6,300 can now be earned in addition without the pension being reduced, limited until the 31st of December 2020.

Compensation for loss of earnings due to childcare
The Infection Protection Act shall include possibilities to claim for compensation in cases of loss of earnings created by closing of schools, nursery homes or daycare centres. The aim is to mitigate income losses of working parents with children aged up to12, if the parents are unable to pursue their professional activities because of their childcaring facilities being closed.
A precondition is that the persons concerned cannot provide any other reasonable care, e.g. by the other parent or emergency care in the facilities, whereas risk groups such as the child’s grandparents do not need to be involved.
Compensation amounting to 67% of net income is to be granted for up to six weeks and is limited to a maximum monthly amount of EUR 2,016.
The employer is responsible for payment, and can submit a refund application to the competent state authority. According to the Ministry, the scheme does not apply to periods when the institution would be closed anyway due to school holidays and is limited until the end of 2020. 

Birgit Ennemoser,  Auren Germany

Birgit.Ennemoser@str-auren.de