Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure DE-2020-10/2132 – Updated – measures in Germany
|Country||Germany , applies nationwide|
|Time period||Temporary, 01 March 2020 – 31 December 2022|
|Type||Legislations or other statutory regulations|
Promoting the economic, labour market and social recovery
– Support for spending, stimulus packages
|Author||Birgit Kraemer (Hans Boeckler Foundation) and Eurofound|
|Measure added||10 January 2022 (updated 31 May 2022)|
In many sectors and professions COVID-19 related measures gave rise to extraordinary workload, burdens, and safety and health risks for employees. Trade unions in all sectors negotiated COVID-19 related compensation payments with employers. The German government decided in April 2020 to support these compensation payments by exempting them partly from tax and social security contributions. Economically, these payments function as a demand-oriented stimulus to keep up consumption and to mitigate rising inflation.
In April 2020, the German Finance Minister Olaf Scholz announced that COVID-19 related special payments by employers of up to €1,500 per employee would be exempted from taxes and social security contributions. This measure was valid initially from March 2020 to the end of 2020. Since then, it has been prolonged twice, first until the end of June 2021, and now until 31 March 2022. According to the Financial Ministry, the exemption of COVID-19 related special payments signifies a recognition of the special efforts employees make during the COVID-19 pandemic. Employers are not obliged to make a COVID-19 related special payment to the employees, but the measure sets an incentive for social partners to include COVID-19 related special payments in their collective agreements.
In most sectors trade unions and employers have included COVID-19 related special payments in their collective bargaining agreements for 2021. The latest analysis of the WSI Collective Bargaining Archive gives an overview (WSI 2021). The level of the payments ranges from €90 in the confectionary industry to €1,300 in the public service of the German states (Länder). The WSI analysis also shows that the COVID-19 related special payments helped mitigating the loss of purchasing power caused by high inflation rates.
|Applies to all workers||Applies to all businesses||Does not apply to citizens|
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
The government set a framework by determining that COVID-19 related special payments of up to €1,500 remain free of tax and contributions. Social partners negotiated collective bargaining agreements including COVID-19 related special payments both on sectoral and company level.
Social partners make use of the measure and agreed on COVID-19 related special payments in several sectors.
Eurofound (2022), Tax and contribution exemption for COVID-19-related special payments, measure DE-2020-10/2132 (measures in Germany), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/DE-2020-10_2132.html
30 January 2023
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12 September 2022
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This article summarises the first policy responses that governments across the EU have started to implement to support companies affected by the rising prices, and those with commercial ties to Ukraine, Russia or Belarus.
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.