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Bespoke shoemaker in Dresden: Protection against lost work
Photo: Thomas Eisenhuth / imago images
The corona crisis dramatically demonstrates the value of social security.
While employees subject to social insurance are covered by the entitlement to short-time work allowance and unemployment benefit, this is usually not the case for the self-employed.
As a result, many self-employed have got into financial difficulties.
Support packages had to be put together on the spot, but they are often perceived as too limited.
The cost of living in particular - i.e. the entrepreneur's wages - was not covered, apart from the basic security, which, however, is out of the question for many self-employed despite the simplified terms of reference in the corona crisis.
The second shutdown exacerbates the tense situation again.
Restaurants, cinemas and theaters have been closed again since last Monday, and even small events are prohibited.
This time, however, the state will largely compensate for the loss of sales.
To person
Photo: Jutta Palm-Nowak
Enzo Weber
, born in 1980, heads the research area for forecasts and macroeconomic analyzes at the Institute for Employment Research (IAB).
He is Professor of Economics at the University of Regensburg.
All of this makes it clear that there is no reliable permanent regulation on how the self-employed can be supported in the event of unemployment or loss of work.
Certain self-employed persons can take out voluntary unemployment insurance, but the conditions are restrictive and the number of self-employed persons insured is therefore low.
The latter does not only affect Germany with its specific regulations, but is the norm internationally.
Above all, there is also a need for short-time working for the self-employed, because in most cases the business has not and will not be finally given up, but the temporary loss of income is immense.
To the author
Photo: KU Leuven
Paul Schoukens
is professor of social law at KU Leuven and of international and European social insurance law at Tilburg University (Instituut Gak chair).
He is also Secretary General of the European Institute of Social Security.
Of course, the question arises: Isn't it in the nature of entrepreneurial activity to bear the risks yourself?
Of course, self-employment is different from dependent employment.
But in the event of a crisis, the problem still exists that the self-employed are immediately about to go to the basic security if the risks arise - but in many cases this is barred to them by the means-tested regulations.
And social security does not only show its benefits in the event of a crisis, but keeps your back free for sustainable and confident professional development.
In addition, comprehensive coverage would mean that the level of wages on the market would include the costs of social security - gross earnings would therefore increase.
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However, if social security is also comprehensively organized for the self-employed, it is all the more important to make the specific rules practicable.
In particular, protection against temporary absence from work -
i.e. short-time working allowance
for the self-employed - is not trivial.
So it's about how high a loss of income is and what causes it.
In particular, care must be taken to ensure that wage replacement benefits are not routinely provided when there are normal fluctuations in the order situation.
Hence, some conditions are necessary:
Thus, a certain
decrease in minimum income
below the current standard should be proven.
A
clear reason
would need
to be given
for the decline in income, which was
involuntary
and actually
inevitable
.
Benefits would then be
paid out
later
.
Finally, it could be
checked
again that the payments were legitimate.
Realistic
perspectives
would have to be shown for
resuming
activity after a
temporary failure
.
While it is in the nature of short-time work that one does not have to be available for job placement, in the event of
prolonged absence from work,
availability for
further training
and other labor market policy measures could be required.
As usual, short-
time
work would have
to be
limited in time
.
The bottom line is that short-time work for the self-employed would be possible in the event of extraordinary events - with clearly defined conditions that should be designed transparently.
Short-time work allowance is an unemployment insurance benefit.
That means: the self-employed would be included in the unemployment insurance.
To finance it, they should pay a contribution based on current income.
In contrast to hastily put together emergency packages, there would be reliable conditions from the outset - both in terms of benefits and financing.
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For the self-employed, the
right to
unemployment benefit
would be
linked to the
actual termination of the activity
- for example the closure of their business.
In contrast to the dismissal of an employee, however, it is difficult to check to what extent this happened involuntarily.
Therefore, it would at least
have to
be
proven
that the business
cessation
took place
for valid reasons
and not for the purpose of claiming the insurance benefits.
In order to avoid false incentives for excessive repeated use, waiting times of several years before receiving unemployment benefits again or a cap on the number of applications could be defined.
However, this severely restricts ongoing social protection.
It would be conceivable instead a less abrupt
experience rating
, which
in the case of repeated use
of unemployment or partial unemployment benefits, the
reduced level of performance
.
In terms of availability for the labor market, entrepreneurial personalities should be given leeway to be able to freely choose to be self-employed when they are unemployed.
However
, if
such efforts fail to materialize, or if
unemployment persists
, it should be ensured that the self-employed are reintegrated into the labor market as quickly as possible.
You would then have
to be available for placement in dependent employment
.
Increasingly more people earn their income from several activities, including a combination of dependent employment and self-employment.
Unemployment insurance should be based on this trend - i.e. finance the contributions from total earned income and accordingly also provide for the possibility of part-time unemployment.
Insurance against unemployment has a high personal and social value, regardless of whether someone has signed an employment contract.
The rules of insurance for the self-employed should be as similar as possible to those for employees, but also be as specific as necessary.
This would create reliable conditions in order not to run into the next crisis as well as the current one.
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