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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-2020-13/381 Updated – measures in Germany

Emergency aid for freelancers, micro-entrepreneurs and solo self-employed

Soforthilfe / Überbrückungshilfe (II+III+IV) / Neustarthilfe

Country Germany , applies nationwide
Time period Temporary, 23 March 2020 – 31 December 2022
Context COVID-19
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Sandra Vogel and Marc Breitenbroich (IW) and Eurofound
Measure added 08 April 2020 (updated 07 July 2023)

Background information

Emergency aid for freelancers, micro-entrepreneurs and solo-self employed with an acute liquidity shortfall due to lost business in the Corona crisis. The measure is based on the Federal Governments decision to issue Emergency Aid Packages. Self-employed and micro-entrepreneurs can receive this grant, if they were not in economic difficulties before March 2020. Losses must have occurred after 11 March 2020.

Content of measure

The Federal Government set up an aid package for solo-self-employed persons, freelancers and micro-entrepreneurs. Small businesses (up to five employees) can be granted a one-off payment worth €9,000 (for a period of three month). If entrepreneurs employ up to ten employees, they can apply for €15,000 (also for three months). The aid is meant to help entrepreneurs with covering their costs for rent, loans or leasing payments and severe liquidity shortfalls. Grants need not to be repaid by the entrepreneurs and if the landlord lowers the rent by 20%, any remaining funds from the grant can be used for another two months. The single federal states and local authorities will deal with the applications.

Updates

The following updates to this measure have been made after it came into effect.

02 August 2022

Recipients of Neustarthilfe 2022 are obliged to submit a final account of all advanced payments until 30 September 2022. Conditions regarding possible repayments are provided in the final assessment. The deadline for the final account for applications submitted via third party reviewers is 31 December 2022.

13 May 2022

The emergency aid programmes for free-lancers were prologned once more. The "Überbrückungshilfe IV" programme was extended until 30 June 2022. Applications can be sent in until 15 June 2022. Conditions remain the same. The "Neustarthilfe Plus" programme will be continued by "Neustarthilfe 2022" programme. For the first half of 2022, can be put in every quarter until 15 June 2022.

06 December 2021

The emergency aid programme Überbrückungshilfe III plus was prologned until 31 March 2022 und renamed Überbrückungshilfe IV. Conditions for applying for grants remain the same. However, the federal government expanded the groups of eligilbe applicants. Companies that were heavily affected by the flooding in summer 2021 can now also apply for grants.

08 September 2021

On 8 September 2021, the details of the prologned emergency aid packages (Überbrückungshilfe III Plus) were released. Überbrückungshilfe III Plus has the same volume and conditions as the previous emergency aid programme (Überbrückungshilfe III) and runs until the end of 2021. However, a new ‘restart premium‘ was added to the programme, which offers companies financial aid with personnel costs related to re-openings and new hirings. Additional funding can be applied for by companies of the travel und event industry. The restart premium can only be applied for, for the months of July, August and September 2021.

16 February 2021

Since 16 February 2021, solo self-employed persons with low fix costs can apply for the so-called restart help (Neustarthilfe) as part of this third emergency aid package. Restart help includes a one-off payment of up to €7,500 for the months of January 2021 until June 2021. Restart help is based on 25% of the annual sales for 2019.

10 February 2021

The application process for the third emergency aid package (Überbrückungshilfe III) started on 10 February 2021. As first decisions on applications and its payments were expected for March, companies could receive up to €100,000 upfront in the meantime. The maximum monthly sum of financial support is €1.5 million depending on the drop in sales for each month. Companies with a drop in sales between 30% and 50% will get up to 40% of their fix costs reimbursed. With a drop in sales between 50% and 70% companies will get up to 60% of their fix costs reimbursed and companies faced with a drop in sales of more than 70% will be eligible to get up to 90% of their fix costs reimbursed. All companies with annual sales of up to €750 million can apply for grants until August 2021.

18 January 2021

On 13 December 2020, the Federal Government introduced the third phase of the emergency aid programme with a running time from December 2020 to June 2021. During the third phase, applicants can receive higher grants (up to €200,000 per month) under certain circumstances and also in retrospect. If applicants are directly or indirectly affected by the governmental lockdown issued in November 2020 and still being in effect on 18 January 2020, they can even receive up to €500,000 per month (under certain circumstances). In addition to the target groups of the former two phases, the programme was also opened to all companies with a yearly turnover no higher than €500 million.

30 October 2020

At the end of Octobre 2020, the second phase of the emergency aid programme started. The programme was extend to NGOs and continues to serve as a financial back up for freelancers, micro-entrepreneurs, solo self-employed persons from all sectors. The second phase of the programme runs from September to December 2020. Emergency aid is granted if applicants' revenues declined by 50% in two subsequent months (between April and August 2020 and compared to revenues in the same months in the previous year) or if applicants' revenues declined by 30% on average (between April and August 2020). Applicants can apply for financial support for a maximum of four months (September to December 2020). The grants are calculated on the basis of the expected decline in revenues for the months September to December 2020. If revenues declined by 90% (60% or 40%) in comparison to the revenue generated in the same month in the previous year, applicants can receive up to 70% (50% or between 30% and 50%) of their fixed operating costs (such as rent, electricity or telecommunication charges).

08 July 2020

On 8 July 2020, the successor programme ‘Überbrückungshilfe’ was implemented. The slightly adjusted programme lowers barriers for micro-entrepreneurs and freelancers wishing to apply for financial assistance. Such companies or freelancers or not-for-profit institutions can apply for funding if their sales dropped by at least 50% in two consecutive months between April and August 2020 and compared to the same period in the previous year. Alternatively, they can also apply, if their monthly sales dropped by 30% on average in the same period. Companies can apply for a maximum grant of €50,000 per month. In order to noticeably help small companies with few employees and very high fixed costs, the corresponding maximum limits for bridging aid will no longer apply from September. Former thresholds for smaller companies or freelancers were dropped. This means that they can also apply for a maximum grant of €50,000 per month. The successor programme runs from September to December 2020.

Use of measure

In 2020, payments had to be stopped (temporarily) in North-Rhine Westphalia and other federal states due to fraud attempts. On 25 June 2020, the Federal States Ministry for Economic Affairs published new figures on the usage of the measure. According to the ministry latest figures, 426,000 solo self-employed persons and micro entrepreneurs received the grant. In total some €4.5 billion were spent.

Further information on the use of the measure was provided by the Federal State of Baden-Württemberg in October 2020. The federal state had provided €2 billion in emergency aid for approximately 250,000 applicants. The Federal State of Hesse granted 134,500 applicants emergency aid worth €905 million.

In mid-January 2021, the Federal Government provided information on the usage of the emergency aid packages I and II. According to the Federal Government's information, local authorities received 122,014 applications for the emergency aid I programme (with maximum grants of worth nearly €1.5 million). Data does not include figures from Baden-Wurttemberg. Until 10 December 2020, the local authorities received another 56,165 applications as part of the emergency aid II programme (with maximum grants worth €1.1 billion (also not including data from Baden-Wurttemberg)).

As of 25 March 2021, companies applied for an overall volume of €5.46 billion. Around €1.6 billion were already granted from the third emergency aid package. The volume of predecessor programme Überbrückungshilfe II (second phase of the emergency aid programme) is €1.96 billion (volume of applications: €2.56 billion). Data does not include figures from Baden-Wurttemberg.

As of 29 June 2021, the financial volume of applications for Überbrückungshilfe III was reported to have reached €18.86 billion. Out of that, €12.58 billion were already granted.

In the statistical update from 14 September 2021, the overall financial volume of funds granted as part of Überbrückunghilfe III is listed at €19.40 billion. The volume of applications for Überbrückungshilfe III Plus is listed at €0.42 billion with €0.17 billion already granted. On 14 December 2021, the Federal Ministry for Economic Affairs and Climate Action stated that a total €25.1 billion were granted for Überbrückungshilfe III and €1.1 billion for Überbrückungshilfe III plus.

On 29 March 2023, the Federal Ministry of Economic Affairs and Climate Action announced in its latest statistical update that the volume of applications for Überbrückungshilfe IV is listed at €5.36 billion with €4.18 billion already granted. Furthermore, the volume of applications for Neustarthilfe 2022 (January to March) is listed at €379.75 million with €346.06 million granted. For the months April to June, the volume of applications for Neustarthilfe 2022, decreased significantly to €188.21 million with €140.33 million granted.

Target groups

Workers Businesses Citizens
Self-employed
Solo-self-employed
One person or microenterprises
Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
Other social actors (e.g. NGOs)
Local / regional government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Direct consultation outside a formal body Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: Peak or cross-sectoral level

Involvement

German social partners are usually consulted by the Federal Government on broader measures, though no formal tripartite social dialogue structure exists in Germany at the federal level.

Views and reactions

The Confederation of German Employers' Association (BDA) and the German Trade Union Confederation (DGB) jointly welcomed the crisis package adopted by the Federal Government in spring 2020.

Sources

Citation

Eurofound (2020), Emergency aid for freelancers, micro-entrepreneurs and solo self-employed, measure DE-2020-13/381 (measures in Germany), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/DE-2020-13_381.html

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