The Temporary Aid Programme IV
Companies and self-employed people were able to claim grants to help cover their fixed costs. The Temporary Aid Programme IV was effective from January 2022 to the end of June 2022. To be eligible for a grant to cover fixed costs, applicants had to prove that their turnover had shrunk by over 30%. Businesses that were particularly hard hit due to having to close during the pandemic received an additional equity injection on top of having their fixed costs reimbursed. This additional support was available in particular to businesses affected by the cancellation of Christmas markets in 2021. The deadline for submitting initial and amended applications was 15 June 2022.
Fresh Start Assistance 2022
The Fresh Start Assistance 2022 scheme provided targeted support in the form of grants to self-employed individuals who, due to not having fixed costs such as office rents or leasing costs, could not benefit from the Temporary Aid Programme. For the period from January to June 2022, the Fresh Start Assistance 2022 scheme provided €1,500 a month in support. This meant that pandemic-hit self-employed individuals could receive up to €9,000 under the Fresh Start Assistance scheme, allowing them to hit the ground running after the crisis.
Support for hardship cases
Support for hardship cases was provided in special individual cases to companies that had run into financial difficulties as a result of the pandemic. It was aimed specifically at companies that were not eligible for financial support under the pandemic assistance schemes provided by the government, Länder and local authorities. Support for hardship cases was regulated at Länder level. Each Land assessed cases on an individual basis and decided which companies would receive hardship support.
Employees and companies can benefit from a range of pandemic-related tax-related assistance measures and simplifications. These include:
- A tax allowance for working from home up to 31 December 2022
- Extended tax return filing deadlines for 2020, 2021 and 2022
- Enhanced option to offset losses up to the end of 2023 and permanent extension of the option to carry back losses to a two-year period from 2022
- Accelerated depreciation options for movable assets
- Tax-free employer top-ups for short-term work benefits up to the end of June 2022
- Extended investment deadlines for tax-deductible investments
Companies, self-employed people and freelancers who were in financial difficulties due to the Covid-19 pandemic could access targeted offers provided by the KfW. The KfW Special Programme, which included the KfW Instant Loan, was available up to 30 April 2022.
Economic Stabilisation Fund (ESF)
The Economic Stabilisation Fund (ESF) offered companies stabilising measures to strengthen their capital base and to help them overcome cash flow shortages. These measures were available to all sectors of the economy. The ESF was targeted towards companies in the real economy whose insolvency would have a significant adverse impact on the German economy or labour market.
The ESF’s stabilisation instruments:
- Federal guarantees for loans, including credit lines, and capital market products (borrowed capital)
- Recapitalisation measures as a direct means of strengthening equity
The ESF encompassed a total volume of €600bn up to the end of 2021. It was available until the end of June 2022 with an adjusted volume of €250bn. The application deadline was 30 April 2022.
As part of the counter-guarantee programmes offered by both the federal government and by the Länder, small and medium-sized enterprises (SMEs) and self-employed people could, together with their main banks, access guarantee instruments when they needed to borrow money or secure additional funds with the silent participation of SME venture capital companies (Mittelständische Beteiligungsgesellschaften). The German government also expanded funding options under the coronavirus assistance programmes to help businesses that had run into difficulties through no fault of their own. Measures enabling this included increasing the guarantee cap and investments to be covered from €1.25m to €2.5m, increasing the risk covered by the federal government and various steps to accelerate the decision-making process. The expanded funding options applied until 31 December 2021.
Short-time work benefit
For a limited time until 30 June 2022, the maximum period for receiving short-time work benefit was extended to up to 28 months. The special rules for easier access to short-time work benefit also continued to apply until 30 June 2022.
Pandemic-related special short-time work rules, including higher benefit rates, a longer entitlement period for short-time work benefit and the inclusion of temporary work, expired on 30 June 2022. However, against the backdrop of the war in Ukraine, the special rule whereby short-time work benefit is paid if a minimum of 10% of a company’s employees are affected by a reduction in work has been extended to the end of September 2022.
Special fund for cultural events
To enable a broad range of cultural events to start up again, the special fund for cultural events will continue to provide financial support up to the end of 2022. For events that would normally be attended by up to 2,000 people but which have to take place on a smaller scale due to Covid-19 restrictions, the financial support tops up revenues from ticket sales and provides an integrated safety net for private event organisers in case events have to be cancelled.