Bundestag decides further corona financial aid

The German state has decided to provid even greater support for working parents, employees on short-time work and restaurants affected by the corona crisis. On Thursday, the Bundestag decided on several financial aids that are to be made available quickly and without complications.

Parents are to receive wage compensation for longer periods if they cannot work at home because of child care. For businesses, tax breaks are planned for restaurants. The German Bundesrat still has to give its approval for the measures to be implemented.

So far the following decisions were taken:


1. Wage reimbursement for parents
Fathers and mothers who cannot work due to the closures of day-care centres and schools will receive more money from the state. The wage reimbursement will be extended from the current 6 weeks to up to 20 weeks. Each parent is entitled to 10 weeks of compensation, single parents to 20 weeks. In addition, the allowance can in future also be claimed for individual days if the children are only looked after in day-care centres or schools on a daily basis. The German state will pay 67 percent of the net income, but no more than 2,016 euros per month. In order to be entitled to the wage replacement, the children must be younger than twelve or must be dependent on assistance due to a disability. In addition, there must be no other appropriate care facility for the children. Care while working in the home office is currently considered acceptable.


2. Less VAT on food in restaurants
The value-added tax on food in the gastronomy sector will be temporarily reduced from 19 to 7 percent. This is intended to support restaurants that have suffered a major slump in sales due to the pandemic. The tax reduction will take effect in July and is limited to one year.


3. Tax-free subsidies for short-time work
The Bundestag also decided that employer's contributions to short-time work benefits should remain largely tax-free. Millions of citizens are currently in short-time work because of the pandemic. Many employers want to top up the short-time work allowance in order to secure the livelihood of especially low-income earners.


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