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Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case DE-2020-13/404 Updated – measures in Germany

Basic income support for solo self-employed

Grundsicherung für Solo-Selbstständige

Country Germany , applies nationwide
Time period Temporary, 23 March 2020 – 31 December 2021
Type Legislations or other statutory regulations
Category Income protection beyond short-time work
– Extensions of income support to workers not covered by any kind of protection scheme
Author Sandra Vogel (IW)
Case created 09 April 2020 (updated 05 May 2021)

Background information

The German Federal Government decided to ease up rules for basic income support for solo-self employed persons. Usually, basic income support is only available for persons in need looking for work. As many orders and engagements of solo self-employed persons were cancelled, the basic income scheme was opened for new target groups, such as solo self-employed persons temporarily out of orders/work. This measure is part of a broader rescue package adopted by the goverment at the end of March 2020, in order to help out German business, freelancers and micro entrepreneurs. The whole package consists of reducing tax burdens, easier acces to loans, start-up support, lowering companies personnell costs by improved short-time working scheme and other financial help for solo- or micro entrepreneurs.

Content of measure

The German Federal Government eased rules for basic income support, in order to help solo self-employed persons to get through the crisis. As it is hard to find new work for solo self-employed and free lancers and many of their jobs are cancelled during the COVID-19 pandemic, the Federal Government opened up the basic income scheme. The new scheme also includes groups that are not truly looking for a new job, but are only temporarily out of business, such as solo self-employed. Applicants for basic income support working as solo self-employed will not have to make any statements on their financial assets and will also not have to tap these assets within the next six months, before being granted basic income support. With the basic income support, they should be able to pay rent or finance their housing. The new rules also provide that application will be provisionally approved and the usual means-testing will be conducted later. In this way, the government hopes to facilitate easier and faster access to these grants.

Updates

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

30 March 2021

At the end of March 2021, the Federal Employment Agency announced that the basic income support for solo self-employed will remain open until the end of 2021. In addition, a one-off payments of €150 is currently debated to be included in an updated version of the programme. However, the programme is currently in its legislative procedure. Details are expected in the next update.

07 January 2021

At the beginning of November 2020, the Federal Government issued another aid package after announcing a partial lockdown in Germany. As part of the package, new rules on eased access to basic income support for solo self-employed were prolonged until 31 March 2021.

08 October 2020

In early September 2020, the Federal Government extended the Social Protection Act 1 until 31 December 2020. This includes basic income support for solo self-employed.

Use of measure

No information to date. The Federal Employment Agency provides data on basic income support. However, this data cannot be broken down to identify solo self-employed persons receiving grants from the new scheme.

Target groups

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

Actors and funding

Actors Funding
National government
Public employment service
National funds

Social partners

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

Trade unions Employers' organisations
Role Consulted Consulted
Form Any other form of consultation, institutionalised (as stable working groups or committees) or informal Any other form of consultation, institutionalised (as stable working groups or committees) or informal

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

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

German social partners (employer and union representatives as well as public body representatives) sit on the board of the Federal Employment Agency that manages the funds of the basic income support scheme. Board members decide on the strategic goals of the Federal Agency, its budget and are also responsible for issuing orders.

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

  • 13 March 2020: DGB and BDA: The social partners share responsibility in the corona crisis over differencesSocial partners neglect differences (DGB und BDA: Die Sozialpartner stellen gemeinsame Verantwortung in der Coronakrise über Differenzen) (www.dgb.de)
  • 09 April 2020: For jobs and the economy: Immediate Assistance Programme and Economic Stabilisation fun (www.bundesfinanzministerium.de)
  • 30 April 2020: Corona-Pandemie: FAQ zur Grundsicherun (www.arbeitsagentur.de)
  • 09 September 2020: New rules on basic income support prologned (www.bmas.de)
  • 06 November 2020: Eased access basic income support prologned (www.bmas.de)
  • 30 March 2021: BA information 30 March 2021 (www.arbeitsagentur.de)

Citation

Eurofound (2020), Basic income support for solo self-employed, case DE-2020-13/404 (measures in Germany), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.