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Social security institutions defer contributions
17. April 2020
Employers can apply for deferment and pay later. In this way, employers in Germany receive support from the social insurance agencies. In exceptional financial situations, employers do not have to pay social security contributions from March to May upon request in order to remain solvent.
This was announced by the GKV Spitzenverband via press release and in a circular letter. Major insurers such as AOK Nordwest have already publicly declared that they will allow deferments. Others will follow suit. The social insurance carriers are deferring contributions. We present the framework conditions and evaluate this measure for you.
Social security contributions in the Corona crisis
Normally the social security contributions would be due next Friday. Meeting this deadline would deprive the economy of around 40 billion euros. In the current crisis, this means an outflow of vital liquidity for individual companies.
In order to preserve this capital, the agreement of the social security institutions offers that employers who, for understandable reasons, have no funds to pay social security contributions due to the corona epidemic, can defer their contributions temporarily until and including May.
Conditions for the deferral of social security contributions
A credible explanation from the company, which has suffered considerable financial damage as a result of the Corona crisis, should suffice.
Is interest due on unpaid social security contributions?
A central point of the aid measure is that no interest is charged for the deferral of contributions. Companies that take advantage of the offer simply pay the full amount of the contributions at a later date. The social insurance companies also waive late payment surcharges and reminder fees.
Can self-employed persons who are voluntarily insured in the statutory health insurance scheme also benefit from this regulation?
The assistance provided by insurers should also apply to self-employed persons who are voluntarily insured under the statutory health insurance scheme. In the case of these self-employed persons, however, it must first be examined whether the possibility of a reduction in contributions due to the drop in profits caused by the crisis can be considered before a deferral of contributions is granted. In this way, self-employed persons and small businesses can also benefit without losing their insurance cover.
The deferral is another helpful and pragmatic measure to secure liquidity, which gives many entrepreneurs time to breath, especially since other support measures are not yet effective in terms of liquidity. The social security institutions do not require employers to provide security, which underlines the unbureaucratic and rapid effectiveness of this measure.
We therefore recommend our clients and all employers to consider this possibility in principle. To this end, we are currently clarifying the final details of the application and will be happy to help you with the analysis and implementation.