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COVID-19 EU PolicyWatch

Database of national-level responses

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 NO-2020-10/730 Updated – measures in Norway

Business Compensation Scheme

Kompensasjonsording for næringslivet

Country Norway , applies nationwide
Time period Temporary, 01 March 2020 – 31 August 2020
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Aasmund Arup Seip, FAFO and Eurofound
Case created 19 April 2020 (updated 18 January 2021)

Background information

The government has established a compensation scheme where the state covers parts of the fixed costs for companies that have had at least 30% decrease in turnover due to the outbreak of Covid-19 and infection control measures. The goal is to help the business sector avoid bankruptcies and recover quickly after the crisis is over. The scheme is temporary and will apply for the months of March, April and May. The government has set up a dedicated site where the companies can apply for grant to cover fixed and unavoidable costs. It is meant to be both easy to use and manage, and designed to give quickly imbursement. The scheme was designed by the government in close collaboration with The Confederation of Norwegian Enterprise (NHO), The Norwegian Confederation of Trade Unions (LO), Enterprise Federation of Norway (Virke), SMB Norway, Norwegian Employers Association for the Financial Sector (FA) and the Tax Administration. The EFTA Surveillance Authority ESA has approved the scheme.

Content of measure

The Business Compensation Scheme will comprise companies with at least 30% drop in sales compared to the same month the year before. For March, the rate will be 20%, since the strict anti-infection measures were first introduced on March 12. The scheme will initially apply to March, April and May, and payments will be made in arrears based on actual sales in the months in question. A two-part model is used for calculating compensation.

  1. Companies instructed by the state to shut down to prevent spread of COVID-19 virus will be able to apply for compensation of up to 90% of their unavoidable fixed costs in the specified months, calculated as follows: reduction in turnover x unavoidable fixed costs x 90 percent adjustment factor.

  2. Firms that are not required to shut down, but still experiencing a reduction in turnover of 30% or more (20% in March), will have to pay an excess. Compensation is calculated as follows: reduction in sales x (unavoidable fixed costs - excess of NOK 10,000/approximately EUR 890) x 80% adjustment factor. The minimum limit for compensation is NOK 5,000. If the support per enterprise exceeds NOK 30 million per month, the excess will be bisect.

Updates

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

18 December 2020

This scheme is finalised. The 18 December 2020, The Norwegian parliament passed a new temporary cash benefit scheme for enterprises with a large fall in turnover after August 2020 recorded as a new case in the database (Case NO-2020-36/1651).

New business compensation scheme for enterprises with large fall in turnover .

01 July 2020

The Government proposed to the parliament on May 29 to extend the compensation scheme from 31 May to 31 of August in a stepped down form. The compensation rate, initially 80%, will be reduced to 70 per cent for June and July and to 50% for August. The regulation took effect on 30 June.

Use of measure

No information to date.

Target groups

Workers Businesses Citizens
Does not apply to workers Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Social partners jointly
Trade unions
Employers' organisations
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

The social partners have been consulted regularly during design and implementation of the measure.

Views and reactions

The social partners have been supportive of the measure.

Sources

Citation

Eurofound (2020), Business Compensation Scheme, case NO-2020-10/730 (measures in Norway), 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.