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Extension of short-time allowance until December 2021

Millions of employees and around ten thousand companies are currently affected by short-time work. For this reason, the grand coalition decided on 25 August 2020 on the following changes to short-time allowance:

  • Longer period of entitlement to short-time allowance

    Short-time allowance can now be drawn for 24 months instead of the regular 12 months, up to the end of 2021 as a maximum. This change only applies to companies that will have introduced short-time work by 31 December 2020. Before applying for an extension of short-time allowance, it must be carefully examined whether all the prerequisites for this are met. This also applies to agreements with employees.
  • Increase in short-time allowance extended

    The increase in short-time allowance to 70% and 77% from the fourth allowance month and 80% and 87% from the seventh allowance month will remain in effect until 31 December 2021. However, the increase can only be claimed if entitlement to short-time allowance has arisen by 31 March 2021.
  • Easier access to and application for short-time allowance

    The currently applicable rules that facilitate access to short-time allowance will remain in effect until 31 December 2021. This applies to all companies that have introduced short-time work by 31 March 2021. Applications for short-time allowance, notifications and documents can be submitted or uploaded online or via an app.
  • Reimbursement of social security contributions

    Companies whose employees are on short-time work will be fully reimbursed for social security contributions until 31 June 2021. From 1 July 2021 until 31 December 2021 as a maximum, at least 50% of the contributions will be reimbursed to all companies that have introduced short-time work by 31 June 2021. If the period of short-time work is used for qualification measures, social security contributions can be reimbursed in full.
  • Mini jobs, temporary work

    Mini jobs up to EUR 450.00 will not be counted. Temporary workers will remain entitled to short-time allowance.

However, the change in legislation still has to be put to the vote in the Bundestag. Consent by the Bundesrat is not required (article 1 of the Law on Temporary Crisis-related Improvement of the Short-time Allowance Regime (KUGErmG, Gesetz zur befristeten krisenbedingten Verbesserung der Regelungen für das Kurzarbeitergeld). Federal Labour Minister Heil has announced that the planned changes will be introduced before the end of September. A date for voting on the bill in the Bundestag has not yet been announced.


For more information, go to:

Corona crisis – First aid from PKF

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