Extension of short-time working allowance in the Corona crisis planned until the end of 2021
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Extension of short-time working allowance in the Corona crisis planned until the end of 2021

The short-time working allowance has existed since the beginning of the acute phase of the Corona crisis in Germany. It is now planned an extension of the short-time working allowance until the end of 2021. Read all information in the overview.

After more than half a year in the Corona crisis, we now know that the measures and circumstances of the crisis will accompany us for a while longer. Accordingly, the economy will remain under pressure.

Temporary arrangements for short-time working allowance in the Corona crisis to be extended

The German government would like to extend the regulations on simplified and increased short-time working allowance, which are currently limited to the end of 2020, to the end of 2021. For this purpose, the second Short-time Working Allowance Duration-Regulation was published in the Federal Law Gazette on October 19, 2020.

The Federal Cabinet has now published a corresponding statement in which it explains the measures for the planned extension of the short-time working allowance in the Corona crisis.

Measures of the planned extension of short-time working allowance in the Corona crisis

The period of entitlement to the short-time working allowance for employees whose entitlement to short-time working allowance arises until December 31, 2020, is extended to 24 months until December 31, 2021.

In addition, a new Employment Protection Act is to come into force on January 1, 2021. We have outlined the contents below.

The following provisions of the short-time working allowance are extended until December 31, 2021.

  • The short-time working allowance is increased to 70 or 77 (with at least one child) per cent from the fourth month and 80/87 per cent from the seventh month for all employees whose entitlement to short-time working allowance has arisen by March 31, 2021.
  • Income from low-paid employment taken up during short-time work will not be taken into account.
  • In addition, the Federal Government wants to increase the incentive to continue professional training if work is interrupted due to short-time work. In this case, it is then no longer necessary for the qualification to be at least 50 per cent of the time of the loss of work in order for half of the social security contributions to be reimbursed.

Further regulations on the extension of short-time working allowance

The first regulation amending the short-time working allowance regulation is to regulate the following from January 1, 2021.

  • Access facilities (minimum requirements, negative working time balances) will be extended until December 31, 2021 for companies that have started short-time working by March 31, 2021.
  • The opening of the short-time working allowance for temporary workers is extended until December 31, 2021 for temporary employment agencies that have started short-time working until March 31, 2021.
  • The full reimbursement of social security contributions during short-time working is extended until June 30, 2021. From July 1, 2021 to December 31, 2021, 50 percent of the social security contributions will be reimbursed if short-time working is commenced by June 30, 2021.

Our assessment

It is right and fair that the Federal Government wants and will extend the measures. The end of the corona crisis is currently not foreseeable and companies need appropriate Planning-Security in times of crisis. Further measures are indispensable.

The early announcement of the extension of measures promotes Planning-Security. Further aids will be made available. The tried and tested instrument of short-time work allowance will be continued. We expressly welcome this.

Do you have any questions about the short-time working allowance? Please do not hesitate to contact us.

Further information on short-time working allowance in the Corona crisis

You could already read various articles on our blog on short-time work allowance in the past months. We have re-listed some of these articles for you:

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Lars Rinkewitz
Lars Rinkewitz
Tel.: +49 211-90 86 70
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