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Merkel open to extending short-time work benefits

2020-08-17T12:43:26.042Z

Short-time work is considered to be one of the state's decisive instruments to cushion the massive consequences of the Corona crisis. After the Vice Chancellor, the Chancellor is now signaling that the short-time allowance should be paid longer. That should be expensive.



Short-time work is considered to be one of the state's decisive instruments to cushion the massive consequences of the Corona crisis. After the Vice Chancellor, the Chancellor is now signaling that the short-time allowance should be paid longer. That should be expensive.

Berlin (dpa) - In the Corona crisis, companies and employees in Germany can hope for a significant extension of short-time work benefits.

Federal Chancellor Angela Merkel (CDU) is "basically positive" on proposals to extend the period of reference to 24 months, said government spokesman Steffen Seibert on Monday in Berlin.

The short-time work allowance has made a significant contribution to the fact that Germany has withstood the global crisis relatively well so far. Seibert said that millions of jobs had been saved. 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 duration of the short-time work allowance 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 maximum period of twelve months for short-time work benefits. When the corona crisis arose, however, the access conditions for companies had been eased. In certain cases, 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 extending the short-time working allowance to 24 months.

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 VDMA mechanical engineering association, 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 loads that our industry is exposed to, this remains a moderate reduction," said Wiechers. Above all, the instrument of short-time work helps.

As a result of the Corona crisis, the economy in Germany collapsed. The worst recession in post-war history to 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 - not millions of people have fallen into unemployment.

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 short-time working allowances, 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.

© dpa-infocom, dpa: 200817-99-197938 / 2

Ministry of short-time work allowance

Federal Employment Agency on short-time work

Source: merkur

All news articles on 2020-08-17

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