Simplification of the application for short-time allowance

Dear Sirs,


due to the corona virus, the German government has adopted several measures to help companies in this difficult situation to get back on their feet or not to go under. In this e-mail, we would like to explain the first measure "Simplification of the application for short-time allowance" and offer our support in implementing it for your company.


Further newsletters will follow shortly, in which we will describe and explain additional measures of the Federal Government.


Simplification when applying for short-time allowance


What does short-time work mean?


Employees work less or not at all for a certain period of time. The missing earnings of the employees are partly compensated by short-time allowance. Short-time allowance is paid by the Federal Employment Agency to the employers.


When can companies apply for short-time work?


When companies experience economic losses due to the corona virus, e.g. due to supply bottlenecks or due to official closures (quarantine or generally ordered closing times, as in the hospitality industry) and are therefore no longer able to fully employ employees, but want to avoid dismissals.


What requirements must be met in order to apply for short-time work?


There are four conditions, all of which must be fulfilled:


  1. substantial loss of working hours combined with loss of remuneration: 


a)       The loss of working hours must have economic reasons (e.g. lack of follow-up orders) or be caused by an unavoidable event (e.g. fire/weather disaster/pandemic). This is undisputedly the case due to the virus. 


b)      It must be unavoidable (up to now, it was the case that in companies where agreements on working time fluctuations were used, these were also used primarily to avoid short-time work and had to be reduced to minus.


NEW: It should be possible to dispense with the accumulation of negative working time balances before payment of short-time allowance, either in full or in part.


c)       In addition, the loss of working hours must be temporary and minimum requirements must be met


NEW: short-time allowance can be applied for if at least 10 percent of the employees are affected by the loss of earnings due to the loss of working hours; previously it was 1/3 of the employees.


d)      Furthermore, the employer is generally obliged to reduce overtime balances and (residual) holiday entitlements before claiming short-time allowance. This also applies if the employee has already planned the holiday elsewhere. The reduction of overtime balances and (residual) holiday entitlements is mandatory for the approval of short-time allowance even after the amendment to the Corona Virus Act! This means that the entire earned holiday entitlement for the year must first be offset.


  1. operational conditions:


At least 1 person must be employed subject to social insurance contributions.


  1. personal conditions:


short-time allowance can only be claimed for employees subject to social insurance contributions. Short-time allowance is not paid for those employees who have already been given notice of termination.


  1. notification to the Federal Employment Agency:


The employer or the works council must notify of short-time work the Federal Employment Agency in writing. This can be done online or using a form provided by the employment agencies. We can also help you with the application for short-time work. The application must be submitted to the responsible employment agency within a cut-off period of three months. The agency responsible is the agency in whose district the payroll accounting office responsible for the employer is located. The period begins at the end of the calendar month in which the days for which the short-time working allowance is requested lie.


It is also possible to apply for short-time allowance for just one department or for just one employee.


Proof must be provided that the above conditions are met. The Employment Agency is obliged to check the eligibility requirements. If the check reveals that the eligibility requirements were not met, the short-time allowance can be reclaimed. Fines and other criminal law measures may be imposed.


The short-time allowance can be applied for retroactively from 01.03.2020.


How long can short-time work compensation be drawn?

The maximum period of support is 12 months, but can be extended to up to 24 months by legal ordinance of the Federal Ministry of Labour and Social Affairs.


How is the short-time working allowance calculated?


The basis for calculating the short-time allowance is the net loss of earnings. Those who work short-time generally receive approx. 60 % of the net remuneration lost, i.e. approx. 60 % of the previous net remuneration, e.g. in the case of complete absence from work. If this applies to households with at least one child, the short-time allowance increases to approx. 67% of net pay.


Example no. 1:


The employee earns EUR 2,000 gross in tax class I full-time. This is approximately EUR 1,400 net. If the employer reduces the working time by half, the employee receives a wage of EUR 1,000 gross, which is only about EUR 800 net. In order for the employee to be able to make a living from this, the employment agency increases the wage by the short-time allowance of approx. 60 percent of the net wage that the employee has lost. The difference between EUR 1,400 full-time net wage and EUR 800 reduced net wage in short-time work is EUR 600. The short-time allowance amounts to approximately EUR 360, so that the employee receives a total of approximately EUR 1,160 per month despite short-time work. If the employee has a child, the short-time allowance is approximately 402 EUR, so that the employee receives a total of 1,202 EUR despite reduced hours. The reduced salary including the short-time allowance is paid by the employer to the employee in the first step. In the second step, the employer receives the short-time allowance in the above-mentioned amount (360 EUR or 402 EUR) from the employment agency.


Example no. 2:


The employee earns EUR 2,000 gross in tax class I full-time. This is approximately 1,400 euros net. If the employer reduces the working hours completely, e.g. due to the ordered closure of the company because of the corona virus, the employee would not receive any wages at all. In this case, too, the short-time allowance would take effect. The short-time allowance would then amount to approx. 60 % and 67 % of the last net wage, namely: EUR 840 and EUR 938 respectively. Also in this case, the employer pays out the short-time allowance in full to the employees in the first step and receives it back from the employment agency in the second step after the application.


What are the costs for employers?


The employment agency only pays short-time allowance for lost working hours. Normally, employers must share the costs of short-time work - in the form of 80% of the social security contributions for the lost gross pay (employer and employee contributions to health insurance, nursing care insurance and pension insurance).


NEW: As a result of the Corona crisis, the state now fully covers the social security contributions that are due for the lost working hours. This means that the employers are not burdened additionally.


What happens if orders are received again at short notice?


If the order situation improves in the short term in a company that has applied for short-time allowance, the short-time work must be interrupted. In this case, the use of short-time allowance can be extended by the months that are suspended. If short-time work is interrupted for three consecutive months, the short-time allowance must be registered again.


What is the application procedure?


First, the employer must inform the employees. If necessary, an agreement with the works council will be concluded for this purpose. If there is no works council, the consent of all affected employees is required. Then the application can be submitted to the responsible employment agency. We will be happy to assist you with this notification. The employment agency will check the reasons and, if necessary, approve the short-time allowance.


The notification of the short-time allowance can be made under the following link:




You can contact us at any time if you have any further questions about the short-time allowance. We will be happy to help you!


Stay healthy!

SKS Steuerberater Sonkin, Seifert and Partner mbB

Office Berlin

Phone: +49 30 308 743 74
Fax: +49 30 308 743 75
E-Mail: info@sks-stb.de
SKS Steuerberatung Berlin
Schlüterstraße 38
DE-10629 Berlin

Office Dresden

Phone: +49 351 563 94 00
Fax: +49 351 563 940 99
E-Mail:  info@sks-stb.de
SKS Steuerberatung Dresden
Glacisstraße 4
DE-01099 Dresden

Office Kiew

Fax: +38 44 2878846

E-Mail: info@sks-stb.de


SKS Steuerberatung Kiew

Sholudenko Straße 3

Business-Center “Kubik-2”

UA-04116 Kiew