Jobs: Germany poised to extend Kurzarbeit scheme

The Local Germany
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Jobs: Germany poised to extend Kurzarbeit scheme
Photo: DPA

Germany looks set to extend the reduced working hours (Kurzarbeit) scheme put in place during the coronavirus crisis.


There is growing support in the German government for an extension of the programme, which allows firms to reduce the working hours of staff to cut costs and stay afloat during tough times.

At the weekend Finance Minister and Vice Chancellor Olaf Scholz of the centre-left Social Democrats (SPD) spoke out in favour of extending the period during which reduced working hours benefits can be paid out until 2022.

"The corona crisis will not suddenly disappear in the next few weeks," he said, adding that businesses and employees needed "a clear signal from the government" that showed they would be helped throughout the crisis.

On Monday Angela Merkel's spokesperson Steffen Seibert said that the Chancellor, of the conservative Christian Democrats (CDU), was “positively” inclined towards the suggestion to extend the scheme, which would cost around €10 billion.

The programme is currently limited to claims lasting a maximum of 12 months.

Some seven million people in Germany have been put on Kurzarbeit since the scheme was launched in March.

Since the coronavirus crisis started, the government has allowed companies to furlough their workers and let the state pay a percentage of their lost wages.

This policy is widely seen as having saved millions of jobs, preventing a steep rise in unemployment. It aims to provide firms with the help they need to get to the other side of the economic crisis.

However, it does have an impact on the amount of tax paid by those who receive the benefit.

READ ALSO: Why people on Kurzarbeit in Germany need to prepare for a tax surprise

The coalition government increased payments during the coronavirus crisis. After four months on the scheme, recipients receive about 70 percent of lost earnings, and they get about 80 percent after seven months if they have lost more than 50 percent of their working hours.


Markus Söder, leader of the CDU's Bavarian sister party the CSU, backs an extension but warned that more support was needed for firms.

"The Kurzarbeit allowance is helpful as an instrument," the Bavarian state premier said."But that alone is not enough. We have to reconsider how we support industries in difficulty such as the automotive, aerospace and mechanical engineering sectors."

A formal decision on an extension is expected at the next coalition committee scheduled for August 25th.

READ ALSO: German firms apply for Kurzarbeit for nearly 12 million workers during coronavirus pandemic


Extension - (die)  Verlängerung

Redundancies/layoffs - (die) Entlassungen

To grow - wachsen

Measure - (die) Maßnahme

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