Financial aid for employers

Coronavirus: Financial aid for employers

To help you keep track of the current exceptional situation, we have compiled the latest innovations for you here. There are changes in the legislation, especially in connection with bridging financing from the Corona crisis fund, direct payments as first aid measures for EPU, micro-entrepreneurs, new self-employed persons and freelancers as well as with regard to rent and lease payments. There is a clear signal of support to companies of all sizes and sectors.

 

Fast-track aid for employers

 

NEW: Emergency aid fund - direct payments


Direct payments as first aid measure - Hardship fund for EPU, micro-entrepreneurs, new self-employed & freelancers

With direct grants from the hardship fund, the federal government has implemented a further measure to cushion the economic effects of COVID-19. Applications for funding for EPU and SMEs can be submitted online via the WKO homepage.

 

Who will be supported?

  • One-person companies
  • SMEs with less than 10 full-time equivalent employees and a maximum of € 2 million turnover or balance sheet total
  • Freelancers such as artists, but also members of freelance chambers such as doctors, lawyers, civil engineers, etc.

 

How much is the funding?

For the time being up to € 1.000,- per company in the coming week.

Grant applicants who have a tax assessment for at least the tax year 2017 or younger, receive

  • for a net income of less than EUR 6,000 p.a. a grant of EUR 500
  • for a net income of EUR 6,000 p.a. or more, a grant of EUR 1,000
  • Grant applicants who meet the eligibility requirements of this directive and do not have a tax assessment certificate will receive a grant of EUR 500.

Subsequently, up to € 2,000 per company, per month for a maximum of 3 months - the guidelines and funding criteria for this grant will be published soon.

 

What are the essential requirements for the subsidy?

  • Company foundation until 31.12.2019.
  • Headquarters or permanent establishment in Austria
  • The company must be affected economically by COVID-19. This means, the company is no longer able to cover running costs OR is affected by an officially ordered ban on entering the premises due to COVID-19 OR registers a drop in sales of at least 50% compared to the same month of the previous year.
  • In the last completed financial year, income before taxes and social security contributions may not exceed 80% of the annual maximum contribution base under social security law (EURO 60,144.-). Grant applicants who do not have an income tax assessment must estimate their income on an annual basis.
  • Compulsory health insurance in accordance with GSVG/FSVG/ASVG. Income from self-employment and/or business operations of at least EUR 5,527.92 p.a. (negligibility threshold).
  • No multiple insurance in health and/or pension insurance.
  • No claim to benefits from private and/or professional insurance to cover COVID-19 effects.

For further information as well as for support in the application process, please contact Christoph Schmidl. Further updates and information will be provided soon.

 

NEW: Bridging finance or guarantees

With the COVID-19 law passed on 15.3. 2020 and the 2nd COVID-19 law published on 21.3. 2020, € 38 billion are now available to overcome the corona crisis. Of this amount, € 15 billion is available for bridging finance from the Corona Crisis Fund and € 9 billion is available as guarantees for bridging finance. To date (as of 26.3.2020), only key figures have been announced. Details are still open and will be added here as soon as they are known. Nevertheless, the key data known to date give a clear signal of support to companies of all sizes and sectors. Up to now, guarantees in bridge financing have only been available for SMEs and some sectors (e.g. real estate) were excluded.

 

Bridge financing from the "Corona crisis fund" (€ 15 billion)

  • Financing volume: discontinued quarterly sales, max € 120 million
  • Non-repayable portion: A portion of the financing amounting to 75% of the operating costs not eliminated in the months March-May 2020 can be converted into a non-repayable grant upon proof in the following year
  • Interest rate: low interest rate
  • Duration: 5 years - extendable to 10 years
  • Target group: directly affected sectors such as tourism, gastronomy and trade (through entry/meeting bans or travel restrictions), no restrictions depending on the size of the company
  • Settlement: application probably via house bank, details still open
  • As of when?: There is no information available yet
  • Miscellaneous: Reference was made to the requirement to retain employees in the form of short-time working

 

Guarantees (€ 9 billion)

  • Conditions: up to which amount bridging finance is guaranteed and how the financing conditions have to be structured, so that a guarantee can be issued, has not yet been announced. Neither has it been announced for what term a guarantee will be granted and whether guarantee fees will be waived. We assume that volume and conditions will be brought into line with the regulations for bridge financing from the Corona crisis fund.
  • Target group: all industries, provided there is an indirect cause for COVID-19, no restrictions regarding the size of the company
  • Settlement: application probably via house bank, details still open
  • As of when?: There is no information available yet

You have to expound that the bridging financing - together with other measures such as short-time working - is sufficient to bridge the liquidity bottleneck. On the basis of a planning calculation (taking into account the changed market situation), you have to show that the business/liquidity can be sustainably maintained and that it will also be possible to service the bridge financing. This means that a simplified planning including liquidity planning for 2020 and at least also for 2021 must be submitted. Its plausibility must be confirmed also.

 

Guarantees via AWS and ÖHT

In addition to the bridging finance and guarantees regulated in the COVID 19 Act, there are also possibilities for guarantees for SMEs via AWS and ÖHT. In response to Corona, the funding guidelines were initially supplemented by separate application provisions for COVID 19. In the meantime, the available funds have been considerably increased, the eligible sectors have been expanded and the formal requirements for the use of the guarantees have been simplified. Among other things, the SME promotion conditions of the AWS were improved as follows:

  • Waiver of the charging of handling and guarantee fees
  • No planning calculations or business plans (caution: the financing bank will only rarely refrain from a forecast calculation)
  • No requirement for loan collateral
  • Freelance activities are now eligible for guarantee
  • Guarantees can also be used to defer existing credit lines
  • Fast procedure for guarantee volumes up to € 100.000,--

Details of the AWS guarantees can be found at

https://www.aws.at/aws-garantie/ueberbrueckungsgarantie/

Details of the guarantees for bridging finance provided by the Austrian Hotel and Tourism Bank (ÖHT) can be found at

https://www.oeht.at/produkte/coronavirus-massnahmenpaket-fuer-den-tourismus/

Regarding subsidies in the tourism sector, we also refer to our information

"Maßnahmen für Tourismusbetriebe zur Bewältigung der Corona-Krise"

 

Further possibilities

There are also separate funding opportunities in the respective federal states. In addition to this support from the public sector, private investors (equity, debt and mezzanine capital) will also offer their support.

Your advisor or Gerda Leimer will be happy to support you in the application process and in clarifying the next steps!

 

Deferrals

1. Deferral or instalment payment of social security contributions

The following options will be available both for contributions by self-employed persons and tradesmen to the SVS and for the payment of contributions by employers to the ÖGK.

  • Deferral
  • Payment by instalments
  • Reduction of the provisional contribution base for the SVS
  • Total or partial leniency with regards to late payment interest

Important in this context is the fact that the legal maturity of the contributions remains.

The ÖGK is now looking to support the companies with some very important payment facilities in order to be able to cope with this emergency situation for the common interest of the Austrian economy. Here you find the current legal measures at a glance (National Council resolution of 20.03.2020).

The ÖGK will support companies with accomodations for payments:

  • Deferrals for the contribution periods February, March and April 2020: For companies affected by the "Closure Ordinance" or a ban on entry under the Epidemic Law, contributions are automatically deferred. Other companies with corona-related liquidity problems can apply for deferral of contributions to the ÖGK. The informal application must include the corona-related problems and must be addressed to the respective regional service centre. For the duration of the deferral, no interest on arrears will be charged.
  • Suspension of recovery measures in the months of March, April and May 2020: In these months there will be no recovery measures such as execution requests etc.
  • No insolvency applications will be filed.
  • No default surcharges are prescribed for late notifications of contribution bases due to corona.
  • Direct debits must be revoked by email or by phone at ÖGK - we will be happy to support you in this process and provide the temporary revocation
  • Debits already made cannot be retransferred!

The ÖGK will make the submission of applications and accounting as unbureaucratic as possible. We will inform you about any changes. In this context, it is important to note that companies will not be disadvantaged if the relevant applications are not submitted immediately.

ATTENTION - Please note:

  • The basic rules of payroll accounting remain in place.
  • The legal due date of the contributions remains unchanged.
  • Applications for compulsory insurance must still be submitted in due time before the start of work.
  • The monthly basic contribution notifications must be sent to ÖGK on the usual dates.

ÖGK requests the companies to maintain their previous excellent reporting and payment morale as far as possible even in these exceptional times and thus continue to enable the functioning of the welfare state.

Employers can contact ÖGK's Employer Service Centre if they have any questions or need clarification.

ÖGK

 

Your Grant Thornton Personal Advisor will be happy to support you in the application process and in clarifying the next steps.

 

Tax office - Accomodation of payments

The payment of a levy can be postponed (deferral) or payment in instalments can be agreed - this also includes wage tax and all non-wage labour costs. Please contact your personal advisor to apply for the accomodation of payments.

 

 

2. Reduction of advance payments for income and corporation tax

The BMF has provided the possibility for all taxpayers to set the advance payments for income or corporation tax at € 0.00 for the year 2020. The necessity and rationale caused by the SARS-CoV-2 virus has to be be substantiated in the application.

If a tax payment is expected for the year 2020, the taxpayer can apply for a reduction of the advance payments up to € 0.00 due to liquidity bottlenecks.

If the reduction results in a subsequent tax payment within the scope of the assessment for 2020, the tax authorities will refrain from setting interest for the subsequent claim.

The tax office must process the applications immediately. We will be happy to submit the corresponding application for you - your Grant Thornton Personal Advisor will contact you in this regard. Your advisor will be happy to support you in filing the application and in clarifying the further steps.

 

3. Tax deferral or instalment agreement with application for exemption from deferral interest and late payment surcharges

In addition to the possibility of reducing advance payments, taxpayers have the option of applying for a deferral of tax payments or an agreeing a payment plan. The necessity of this must be clearly attributed to the SARS-CoV-2 virus and substantiated as such in the application.

This possibility exists for VAT payments and wage payments. With the application, it is also possible to apply for the non-determination of interest and late payment surcharges.

These applications must also be dealt with immediately by the tax authorities.

Your Grant Thornton Personal Advisor will be happy to support you in filing the application and in clarifying further steps.

 

Short-time working

Application for short-time work

Please find news on the procedure and sample templates for short-time work here

In addition to the previously possible variant of reduced working hours with a 6-week application period, there will be a significantly shortened and extended variant as of Monday:

Within 48 hours, companies of all sectors and all sizes can apply for short-time working [forced reduction in hours] at the responsible Public Employment Service AMS. The procedure is as follows:

  • Contact the responsible office of the AMS (by telephone or via eAMS account or e-mail)
  • Social Partner Agreement
  • Application to AMS

As an employer, you must agree with the works council or, in companies without a works council, with the individual employees on the duration and extent of short-time work (i.e. how many hours per week are to be reduced). The agreement is initially possible for a maximum of 3 months, extensions will be possible.

The agreement must then be submitted to the interest groups (chamber of commerce and trade union) for signature - this will be done within 48 hours. From this time on, it will be possible to apply for the short-time work allowance at the responsible Public Employment Service.

Please note, however, that it is necessary to reduce time credits and holidays from previous years before the social partners give their approval. During these periods, the employer must continue to pay the allowance based on time worked before short-time work.

For the first time, working on short time can be extended to up to 100%. Over the entire short time working period, however, the work performance must be at least 10%. Employees will of course continue to be paid their (aliquot) remuneration by their employer for any work they continue to perform in the company.

However, for the hours not worked or reduced, employees will receive short-time work compensation to replace the previous salary for the reduced working hours.

This net replacement rate is staggered according to the previous income level:

  • 80% net replacement rate if the remuneration before short-time work exceeds € 2,685.00 gross
  • 85% with a remuneration between € 1.700,00 and € 2.685,00 gross
  • 90% with a monthly fee of up to € 1.700,00 gross

The AMS bears the additional costs, not the employer. The employer is entitled to reimbursement of expenses by the AMS up to the maximum contribution basis.

The advantage is that the employment relationship is maintained, and the net income of the employee is approximately equal. The social security contributions are to be paid based on the salary before short-time work. The AMS flat rates also include the pro-rata social security contributions. According to current information from the AMS, the new short time working model also includes these increased contributions from the fourth month onwards.

After the end of short-time work, the employment relationship can continue as before the start of reduced working hours. The employer is also obliged to maintain the employment level during short-time work and up to one month after the end of short-time work. In the event of special circumstances, negotiations are to be held on the reduction or removal of the notice period.

Martin Schmidt and Christoph Schmidl will be pleased to assist you with your application today!

 

Cash management

Even if nobody can predict the duration and intensity of the crisis, an assessment of the financial situation is crucial. Possible scenarios of business developments must be shown, and the liquidity requirements must be determined. Here, a combination of the various support measures such as short-time work and bridging financing must be depicted in order to apply for support measures correctly and in a timely manner. Only a well-documented financing / guarantee application will also be assessed positively and thus be helpful for the company. In addition to the public sector, it will certainly also be possible to approach private investors (debt and equity capital, mezzanine capital). Please feel free to contact us.

Your advisor or Gerda Leimer will be happy to support you in the application process and in clarifying the next steps.

 

NEW: Rent and lease payments

Rents and lease payments may be reduced if operations are restricted or closed down due to COVID-19 measures. In case of doubt, we recommend to pay the rent only under reserve. Each individual case must be examined in detail.

For further information and clarification of further steps, please contact Martin Wagner. Further updates and information will follow.

 

Paid leave of absence

It is possible to arrange a special childcare period with all employees who have childcare obligations for children up to the age of 14 for the 3 weeks until the start of the Easter holidays on April 3rd, 2020. The state will cover one third of the costs. The decision whether special care time can be offered is made by the employer. The entitlement to remuneration is capped at the monthly ASVG maximum contribution basis and must be claimed from the responsible tax office within 6 weeks of the day on which the official measures are lifted.

Christoph Schmidl will be happy to assist you with personnel issues and payroll accounting.

 

Interdisciplinary crisis management

For organisations of all sizes, Grant Thornton Austria offers a comprehensive approach to successful crisis management. The Crisis Response Team of Grant Thornton Austria combines the experience of four renowned experts for the following tasks:

  • Crisis Management & Security
  • Liquidity & Corporate Planning
  • Disputes & Strategy
  • Financing & Structure

For further information concerning crisis management issues please contact Marlene Halikias

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Contact us - We are always available for you - even in this crisis. In the next few days we will keep you regularly updated on the current status of the above-mentioned government measures. Our experts from across our teams are able to advise and pleased to help you with respect to current and future liquidity planning and assist in planning and conversations with banks and other financing partners.

 

Your consultant and Gerda Leimer (T(direct) +43 1 5054313 3128,  and Werner Leiter (T(direct) +43 1 5054313 3114, as members of the Task Force Covid19, will support you with the above-mentioned topics and introduce you to our relevant specialists.