Short-time workers should not forget this detail when it comes to company pension schemes

The reference time for short-time work benefits in times of Corona is to be extended.

Short-time work also has consequences for company pensions. 

• It is still easier for employees to be sent on short-time work.

  That is what the cabinet decided.

• The reference period for short-time work allowance is to be extended to up to 24 months, at most until the end of 2021.

• Easier access for companies to short-time work benefits * is an important measure in the corona crisis.

  However, there are also consequences for short-time working with the company pension.

Corona crisis: Short-time work also has consequences for company pensions

Update from 09/24/2020: Short-time working

 not only affects the net pay - but also the amount of later benefits from the

pension *, as reported by the German Press Agency (dpa).

According to dpa, Erich Nöll from the Federal Association of Income Tax Aid explains the background as follows: "As a rule, the promised benefits depend on the current remuneration."

Because, so it says in the dpa report: The short-time work allowance as a social security and wage tax-free wage

do not count as the basis for the later

The same applies to the tax-free employer subsidies for short-time work allowance.

Those affected should

keep an eye on

the consequences of

for the respective

entitlements and compensate for them if necessary.

So that a supply gap does not arise later.

Also read:

Short-time work allowance is extended - what employees on short-time work should know

Update from September 17, 2020:

Germany's companies should be able to

send

their employees to

more easily

because of the

.

"Short-time work is the most stable bridge over a deep economic valley," said Federal Labor Minister Hubertus Heil (SPD) of the German Press Agency (dpa) after the decision of a corresponding draft law in the Federal Cabinet on Wednesday.

The reference period for

is

,

.

The extension should apply to all companies with the start of short-time work by the end of 2020.

The

is further increased according to dpa of otherwise 67 percent to 70 percent of wages - and for working adults with children 77 percent.

This increase takes effect from the fourth month.

From the seventh month, there are 80 and 87 percent respectively.

All employees who start short-time work by March 31, 2021 will benefit from the increase. Mini-jobs up to EUR 450 will generally remain free of credit until the end of 2021.

Read here:

Short-time work in the corona crisis: So many people were affected in June 2020

Update from 09/01/2020

: In June 2020, according to preliminary figures from the Federal Employment Agency, 5.36 million people in Germany were on

.

This is reported by the German Press Agency (as of September 01, 2020).

In May, the number had been 5.82 million.

In April it had soared to a record 5.98 million.

The

labor market experts do not give

a

for July.

They extrapolate the figures for short-time working and adjust them monthly so that they can change retrospectively.

"But the trend goes down when nothing more happens," said the chief executive of the Federal Agency, Detlef Scheele, according to dpa.

This is also confirmed by a survey by the Ifo Institute, as dpa further reported.

According to this, in August 37 percent of the companies taking part in the survey had short-time working, in July it was 42 percent.

Also read:

Corona crisis: Federal Employment Agency names the level of unemployment

Although the number of unemployed rose again - as in the previous month, not because of the corona, but because of the summer break.

According to the Federal Employment Agency, 2.955 million people were unemployed in August, around 45,000 more than in July, as reported by the dpa.

That is a similar increase as in the previous year.

Experts are therefore cautiously optimistic, but still see many risks.

Short-time work allowance: Extension until the end of 2021 with the help of taxpayers' money

Update from August 26, 2020

: Companies in Germany can continue to secure jobs in the Corona crisis through simplified short-time work.

The heads of the Union and SPD agreed on Tuesday evening to

.

Labor Minister Hubertus Heil (SPD) wants to bring the plans to the federal cabinet this Wednesday.

The extended period is

.

At the longest, the short-time allowance should be extended until December 31, 2021.

So that the Federal Employment Agency (BA) can shoulder the billions in costs for short-time work, the coalition wants to

- as a grant and not as a loan.

Extension of short-time work allowance until the end of 2021: incremental increase

The short-time work allowance will be increased further

.

These rules are to be extended to December 31, 2021 for everyone who is entitled to short-time work benefits by March 31, 2021.

The regular short-time allowance amounts to 60 percent of the lost net wage, 67 percent for working people with children.

Short-time work allowance provides a lot of discussion material

The rule that

credit will be extended from existing additional

.

The possibility that temporary workers can receive short-time work allowance is extended.

Applicable tax relief for employer subsidies on short-time work allowance is granted until December 31, 2021.

And depending on the development of the pandemic, a further possible extension should be decided later.

The Union recently opposed what it considered to be an overly generous extension of the instrument.

For example, the CDU labor market expert Weiß criticized the fact that, according to Heil's original plans, companies should receive full reimbursement of social security contributions from employees on short-time work by March 2022.

IG Metall boss Jörg Hofmann had demanded as a condition for reimbursement of social security contributions for employers that companies

.

Further qualification should also be necessary for a complete reimbursement.

The Institute for Employment Research (IAB) had also advocated extending short-time working as a rule to use the time for professional qualification.

Critics had warned that short-time work should not be mixed with short-time work in structural change due to the Corona lull.

Businesses shouldn't be artificially preserved.

Corona crisis: extend short-time allowance to 24 months

Original article dated August 18, 2020

: Thanks to

work benefits, millions of jobs have been saved, said Seibert.

A possible extension of the subscription period in the Corona crisis will have to be discussed within the federal government.

The coalition partners wanted to discuss in a coalition committee how this should be structured.

Vice Chancellor and Federal Minister of Finance Olaf Scholz (SPD) had told "Bild am Sonntag" that he wanted to extend the period for which the short-time work allowance was received to 24 months.

The corona crisis will not suddenly disappear in the next few weeks.

"Companies and employees need a clear signal from the government: We are going with you all the way through the crisis, so that no one is laid off without an emergency."

Basically, there is currently a

for

.

When the corona crisis arose, however, the access conditions for companies had been eased.

, the duration of the benefits can already be extended to up to 21 months.

In June, the economic ministers of the federal states had already spoken out in favor of

the short-time working allowance to

.

Business associations welcomed the plans.

Scholz is on the right track if he wants to extend the duration of the short-time allowance to 24 months, said Ralph Wiechers, chief economist of the mechanical engineering association VDMA, on Monday.

The corona crisis, trade barriers and structural change in the auto industry had cost mechanical engineering in Germany 32,000 jobs in the first half of the year.

"In view of the immense stresses that our industry is exposed to, this remains a moderate reduction," said Wiechers.

Above all, the instrument of short-time work helps.

Read here:

The

demand for an extension of the period of entitlement from CDU / CSU parliamentary group vice Carsten Linnemann (CDU) met with

.

Scholz's move is "impressive evidence of what is in store for us before next year's general election," he told the Frankfurter Allgemeine Zeitung on Monday.

“Money is being redistributed as if there was no tomorrow.” Instead of more and more transfer payments from the state, Linnemann demanded “a smart procedure that brings endangered companies and their creditors to the table”.

It is necessary to tackle structural reforms instead of preserving standstill - even if there is less short-term applause for it.

Read here

Corona crisis leads to unprecedented levels of short-time work

As a result of the Corona crisis, the economy in Germany collapsed.

The

date is expected for the year as a whole

.

This has led to an unprecedented level of short-time work.

According to the latest official figures from the Federal Employment Agency, the number of people on short-time work rose to 6.7 (April: 6.1) million in May.

The instrument of short-time work is one of the decisive stabilizers for the labor market in an economic

crisis situation.

It prevents layoffs on a broad front and helps companies to keep their qualified workforce together so that they can get started again after the crisis.

In this way, in Germany - unlike in the USA -

.

The short-time work allowance is usually 60 percent of the missing net wage - 67 percent for parents with children.

But

from the fourth month onwards

there is

70/77 percent, from the seventh month 80/87 percent.

Social security contributions are fully reimbursed by the Federal Employment Agency.

The

Federal Agency had to spend 7.85 billion euros in the first six months

for

including social benefits.

According to previous scenarios, the reserve of almost 26 billion euros will be used up in 2020, the agency's chief executive, Detlef Scheele, said.

The federal government must therefore step in.

Also interesting

: Pay attention to Corona help with tax: Beware of unpleasant surprises.

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