Coronavirus in Germany: Who will receive financial help – and how much?

Coronavirus in Germany: Who will receive financial help - and how much?
Source: ZB
The Bundestag has already agreed on emergency action, now the Federal Council wants to get started: The enormous aid programs in the Corona crisis should come into effect quickly, but nobody knows yet whether they will be enough.

The Corona crisis has been defining our lives for weeks – changing how we shop, how we spend our free time and how we work. But many people are not only having to drastically limit their everyday lives, but are also living in fear for their existence.

The German government has stepped in with an aid package of historic proportions, which was officially passed on Friday.

READ ALSO: Germany gives green light to €1.1 trillion aid package

It saw the the federal government making new record debts by raising €156 billion in loans.

Nevertheless, it remains unclear whether the measures will be sufficient, or whether the money will get to where it is needed quickly enough. These are the groups which can now hope for support:

Tenants

Tenants may not be given an eviction notice in the next three months if they are unable to pay the rent because of the Corona crisis. However, they must prove that their inability to pay the rent is actually due to the pandemic and the obligation to pay remains, but is simply suspended.

READ ALSO: German government promises relief for renters amid corona crisis

Those who cannot pay electricity, gas, telecommunications and in some cases, water bills due to the crisis should not be cut off. This is particularly important, as homes still need to use a lot of heating and people are more dependent on the Internet and telephone than before.

Parents

Those with children can claim relief in the form of child benefit allowance up to a maximum of €185 per month and for the time being, only the income of the last month, rather than the last six months, will be checked when applying.

The state will also continue to pay 67 percent of wages, up to a maximum of €2016 for an initial period of six weeks, if parents have to stay home to look after their children under the age of 12 due to school and nursery closures. This will not apply to the Easter holidays, when the facilities would be closed anyway.

Photo: DPA

Employees

The federal government wants to prevent mass unemployment and will therefore enable short-term work benefits, as it did during the financial crisis of 2008/2009.

If there is no work available, a company can send its employees into short-time work (Kurzarbeit). The Federal Employment Agency then will pay 60 percent of their wages and 67 percent of those with children. Companies will also be reimbursed for social contributions.

Employers can apply for short-time work benefits when ten percent of employees are affected by the loss of work. The government assumes that it will have to pay short-term economic benefits in 2.15 million cases – but experts believe even this figure may be an underestimation. In some industries, companies are increasing short-time work benefits.

Hartz IV claimants

Job centres will waive the property and rent assessments for those applying for Hartz IV for the next six months. Hartz IV welfare recipients will no longer have to go to their employment agency in person, but can simply call instead, and applications for unemployment benefits can be made by phone or online.

Out of work self-employed

One-person businesses, musicians, photographers, alternative health practitioners and also small companies with up to ten employees can apply for direct financial injections.

READ ALSO: How freelancers and small businesses can apply for coronavirus payments in Germany

They currently receive very few loans, which is why the state wants to give them between €9000 and €15.000 over the next three months, depending on their size. The grants are expected to total €50 billion.

Source: ZB

Larger companies

The state development bank KfW is offering an unlimited loan program for all companies. They will also be able to defer tax payments in the event of a financial emergency and do not have to pay any social contributions for the time being.

Instead, contributions to health, unemployment, pension and long-term care insurance can be deferred until May. Bankruptcy law will also be relaxed so that companies do not go bankrupt so quickly.

READ ALSO: Germany unleashes biggest post-war aid package against coronavirus

Large companies can also make use of a protective shield: the federal government is planning €600 billion for guarantees and, if necessary, to take a stake in the companies.

After the crisis, according to Finance Minister Olaf Scholz (SPD) they should be re-privatized, preferably with a profit. This should apply to companies with high sales or more than 250 employees.

Hospitals

Hospitals will get a huge financial injection: €50,000 will be available for each new intensive care unit providing artificial ventilation. Hospitals will receive an addition €560 per day for every bed which is kept free.

The federal government may also take measures to procure medicinal products and protective equipment.


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