Protection for the self-employed and social services

Social welfare Protection for the self-employed and social services

Nobody is to see their existence threatened as a result of the economic impacts of the corona pandemic. The German government intends to make it easier for the self-employed to access social welfare and aims to support important sectors. The German Bundestag has now adopted the social welfare package. 

A man sits at a table with a laptop

Assistance for the self-employed - assets testing is to be discontinued for the meantime

Foto: picture alliance/Bildagentur-online

The swift spread of the coronavirus is having a tangible impact on the economy and on employment. Individual branches are seeing their business drastically curtailed or completely halted. Some are seeing all orders dry up, as major events like trade fairs are cancelled, supply chains collapse and shops close. In some cases, social services providers are also closing up shop.

For small enterprises, freelancers and one-person businesses the current situation can threaten their very existence. As a general rule they have few financial reserves. And they have no access to safety nets such as unemployment benefit, short-time work allowance or insolvency allowance. The German government has launched legislation to facilitate their access to social welfare benefits.

Basic income for the self-employed, older people, and people with reduced earning capacity

The self-employed, especially small enterprises, freelancers and one-person businesses are to receive the basic income for job-seekers swiftly and unbureaucratically, under simplified procedural rules. To this end, for instance,

  • Assets testing has been suspended
  • The actual amounts paid as rent will be accepted as appropriate.

Older people and people with reduced earning capacity can also be affected by significant loss of income, particularly when the income of the main earner in a mixed household is lost. Those entitled to payments under social compensation law can also be affected. The planned measures are to cover these cases.

The legislation thus ensures that comparable protection is in place across all livelihood-securing systems. The regulations are to apply initially until 30 June 2020. If necessary, they can be extended until 31 December 2020.

Children’s allowance for families

Families suffering losses of income as a result of the corona crisis will, for a limited period of time, be given easier access to children’s allowance. Procedures will no longer look at the income from the last six months, but only at the income of the previous month. Assets testing will also be suspended.

Families who have received the highest overall children’s allowance over the last authorisation period will see their entitlement extended for a one-off period of six months, without any re-appraisal of their income. This will ensure that the allowance can continue to be paid without interruption. This will apply from 1 April to 30 September.

Addressing staffing shortages

As a result of the corona crisis there is a particularly high demand for medical staff. Staffing shortages can, however, also occur in other vital areas as staff become sick or are quarantined. This legislation thus makes it easier for pensioners to carry on working or to return to work. The additional income that a pensioner may earn has thus been temporarily raised from 6,300 euros to 44,590 euros.

To ensure that enough staff are available, incentives will be put in place for individuals receiving short-time work allowance to help out voluntarily while they are not working. The maximum period for short-term employment for seasonal workers without social insurance cover is also to be raised to five months. This should benefit the agricultural sector in particular.

To ensure supplies for the people, the legislation also makes it possible to authorise nationwide exceptions to the Working Time Act (Arbeitszeitgesetz).

Support for providers of social services

Providers of social services in Germany are to contribute actively to addressing the impacts of the corona crisis. But they too are acutely affected by serious financial losses as a result of the pandemic, with some facing insolvency. To retain these service providers, the German government will support them with subsidies. This applies, for instance, to facilities for people with disabilities, services for children and young people, women, families and senior citizens.

What is phrasing assistance?
It is common practice for the German government to assist the legislative activities of the German Bundestag. Equally, however, the German government can elaborate a bill and have it agreed by the Cabinet ministers, although the government does not itself introduce the bill into the German Bundestag. It leaves parliament to do this itself. The procedure adopted within the government is essentially equivalent to that adopted for a government-sponsored bill. The Cabinet decision then specifically refers not to a bill, but to phrasing assistance.