Despite falling infection rates and progressive vaccination, many companies are still heavily burdened by pandemic-related restriction measures. On 9 June 2021, the Federal Cabinet therefore adopted the Third Ordinance Amending the Short-Time Work Benefit Ordinance to extend the facilitated access to short-time work benefit and full reimbursement of social security contributions until 30 September 2021. At the same time, the Cabinet approved the extension of Bridging Aid III until the end of September 2021 as well as a restart premium for companies.
Extension of the facilitated access to short-time work benefit
The Amending Ordinance will also allow those companies that introduce short-time work by 30 September 2021 (previously 30 June 2021) the facilitated access to short-time work benefit that is limited until 31 December 2021. According to the regulations on facilitated access to short-time work benefit, only a minimum of 10 percent of the employees working in the business or business department, as opposed to at least one third, must be affected by a loss of pay of more than 10 percent in each case. In addition, the build-up of negative working hour balances will be dispensed with and it will also become possible for temporary workers to receive short-time work benefit. The decisive factor is when short-time work commences. For short-time work commenced on or after 1 October 2021, the facilitated access requirements will no longer apply.
Reimbursement of social security contributions
Furthermore, 100 percent of the social security contributions attributable to the short-time work benefit will continue to be reimbursed until 30 September 2021. Under this scheme, for a limited period until 31 December 2021, 50 percent of social security contributions will be reimbursed in case of companies that have introduced short-time work by 30 September 2021. If short-time work is introduced on or after 1 October 2021, the company will no longer be reimbursed with the social security contributions.
Reimbursement of social security contributions after filing for insolvency
The payment of social security contributions - even in case of the reimbursement of the contributions by the German Federal Employment Agency pursuant to §2 German Short-Time Work Benefit Ordinance [Kurzarbeitergeldverordnung – KugV] - may possibly be successfully challenged after the opening of insolvency proceedings. In this case, the Federal Employment Agency would then have to reimburse the collection agencies with the amount for the period of the insolvency benefit returned on grounds of the challenge pursuant to § 175 German Social Code Book III [Sozialgesetzbuch III - SGB III], which means that there is a risk of the double payment of social security contributions by the Federal Employment Agency.
In order to prevent this, the Amending Ordinance generally excludes the reimbursement of social security contributions after a petition to open insolvency proceedings has been filed until the petition has been withdrawn or the court has ruled on the petition. This does not apply if an insolvency law challenge of the contributions paid is legally excluded.
Bridging Aid III Plus and Restart Premium
Furthermore, the so-called Bridging Aid III as a central aid instrument is being extended as "Bridging Aid III Plus" until the end of September 2021. A new feature of the "Bridging Aid III Plus" programme is a so-called "Restart Premium". Companies that bring employees out of short-time work earlier or hire new employees will in future receive a personnel cost allowance as a subsidy for the resulting increase in personnel costs, as an alternative to the existing flat-rate personnel cost allowance. Companies will thus receive a subsidy of 60 percent on the difference between the actual personnel costs in the subsidy month of July 2021 and the personnel costs of May 2021. In August, the subsidy is then only 40 percent and in September 20 percent. From October onwards no further allowance will be granted.
The agreed changes to short-time work benefit shall come into force shortly. The "Bridging Aid III Plus" with Restart Premium will be adapted in the previous support programme of the Federal Government and can then be applied for via the known platform (https://www.ueberbrueckungshilfeunternehmen.de/UBH/Navigation/DE/Home/home.html).