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Factsheet for measure SK-2020-25/896 Updated – measures in Slovakia

Rent subsidies for business which had to stay closed

Dotácie nájomného

Country Slovakia , applies nationwide
Time period Temporary, 17 June 2020 – 28 February 2022
Context COVID-19
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Rastislav Bednarik (IVPR)
Measure added 30 June 2020 (updated 07 February 2022)

Background information

The first measures to help entrepreneurship during the corona crisis were more focused on maintaining jobs. In business, however, there is also a need for spaces that entrepreneurs rent to a significant extent from the owners. This measure in the form of a law is aimed at helping entrepreneurs who rent business premises and for which they have to pay rent. The state subsidy will go to pay part of the rent for the use of the premises, which were closed due to a government regulation for the spread of coronavirus. Entrepreneurs for whom the anti-pandemic measures of the state have limited their income and have rented their premises can apply for a subsidy from the Ministry of Economy for rent in the second wave of the pandemic. As in the first wave, the amount of the subsidy is the same as the discount provided by the landlord.

Content of measure

First, there is a negotiation between the landlord and the tenant about the amount of discount. The state pays the landlord a subsidy in the same amount as he gives the entrepreneur a discount on rent. The ceiling is 50% of the amount of rent for the period of difficult use of space. In such a case, the landlord will forgive half of the rent and the other half of the rent will be refunded by the state.

The tenant for the period will not pay anything for renting the premises. If the landlord and the tenant agree on a lower discount (e.g. 30%), the state will contribute equally (30%) and the rest (40%) must be paid by the entrepreneur renting the premises. In this case, the tenant can spread the payment of unpaid rent in instalments over 48 months. During the payment, the landlord is not entitled to unilaterally increase the amount of rent. The assistance provided to the tenant is financed from the resources of the state budget of the Slovak Republic. The maximum amount of the grant for one applicant is €800,000. The subsidy covers only rent, not energy supply.

Updates

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

17 December 2021

The government has extended the rental period until 28 February. The call for applications for the period of the 3rd wave of the COVID-19 pandemic was launched by the Ministry of Economy of the Slovak Republic on 17 December 2021.

28 February 2021

The Ministry of Economy extended the deadline for submitting applications for the provision of rent subsidies until 30 June 2021. Retail establishments and establishments providing services, which have been restricted as a result of the curfew measures adopted, shall submit two separate applications. For the period from 24 October 2020 to 8 November 2020 (14 November 2020) according to the district in which the establishment is located. The second application for the period from 19 December 2020 to 28 February 2021. Specific establishments (gastronomic establishments, fitness centers, cinemas and theaters), as well as school facilities and establishments in schools, have the possibility of submitting an application for the period up to 28 February 2021.

02 October 2020

So far firms in difficulty could not apply for state aid to cover rents. Only the change in the conditions made by the European Commission allowed to support SMEs ( the 'de minimis scheme' ). The Ministry of Economy of the Slovak Republic (MH SR) subsequently extended the range of entities that can obtain a subsidy for rent - by companies in difficulty. Applications can be submitted until 30 November 2020.

Use of measure

Based on a mutual agreement, the renter will ask the landlord to submit an application for a rent subsidy for the period of difficult use. The application is submitted by the landlord on behalf of the tenant, on the landlord's own account. The application must be signed on behalf of both parties, by all authorized persons of both entities, with a qualified electronic signature. The application is submitted to the Ministry of Economy of the Slovak Republic in the period from 23 June 2020 to 30 November 2020. The total amount of available resources provided by the Ministry of Economy for this purpose is €200 million (for about 70,000 to 100,000 applicants). The funds come from national sources.

By 24 August 2020, the MH SR received 9,562 applications for rent subsidies, of which 3,558 have already been paid. The amount of subsidies exceeded €6.5 million. However, the Minister, Richard Sulík, stated that the Ministry expected greater interest from entrepreneurs.

By 1 December 2020, the Ministry of Economy registered 16,890 applications submitted by entrepreneurs and paid them €35.52 million in rental subsidies.

On 3 March 2021, the Minister of Economy informed that the Ministry had already paid out 30,825 applications in the total amount of €56.8 million within the first and second wave of the pandemic. On the contrary, the first assumption that the scheme will be used by 100,000 applicants with an estimated subsidy of €200 million was not met. One of the problems is that landlords are often reluctant to provide a discount to users. According to the Ministry of Economy (14 May 2021), rental subsidies were provided in two rounds. The first round of assistance ended on 30 November 2020 and the Ministry of Economy paid 19,359 applications at the total amount of about €39.9 million. In the second round from 1 December 2020 (as of 14 May 2021), the Ministry of Economy paid more than €49 million in rent subsidies to almost 35,000 applicants.

As of December 3, 2021, the state paid, within the framework of rent subsidies, almost €134 million.

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
Company / Companies
National funds

Social partners

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

Trade unions Employers' organisations
Role Informed Consulted
Form Not applicable Consultation through tripartite or bipartite social dialogue bodies

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

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

Involvement

The issue of rent subsidies was raised by employers at a meeting of the Economic and Social Council (tripartite body).

Views and reactions

The measure was launched in mid June and at the time of writing, the responses of the social partners to the introduced measure are not yet available.

Sources

  • 21 May 2020: Minutes of the Economic and Social Council of the Slovak Republic (tripartite body) meeting on 21.5.202
  • 17 June 2020: Act 155/2020 Coll. supplementing Act no. 71/2013 Coll. on the provision of subsidies within the competence of the Ministry of Economy of the Slovak Republi (www.slov-lex.sk)
  • 24 August 2020: TASR, Odbor komunikácie MH SR: Získať dotáciu na nájomné môžu už aj podniky v ťažkostiach (www.mhsr.sk)
  • 22 September 2020: Act 264/2020 Coll. amendment to Act 67/2020 Coll. on certain emergency measures in financial issues (www.slov-lex.sk)
  • 09 December 2020: Act 349/2020 Coll. supplementing Act no. 71/2013 on the provision of subsidies within the competence of the Ministry of Economy of the Slovak Republi (www.slov-lex.sk)
  • 08 April 2021: Minister hospodárstva R. Sulík: Našou úlohou je vyplácať dotácie, nie robiť rozhodcu medzi nájomcom a prenajímateľom (www.mhsr.sk)
  • 07 July 2021: MH SR: Na nájomné v druhom kole pôjde vyššia podpora ako za celé prvé kol (www.economy.gov.sk)
  • 03 December 2021: Current rental subsidie (www.srovpraxi.sk)
  • 17 December 2021: Extension of rental subsidies (najmy.mhsr.sk)

Citation

Eurofound (2020), Rent subsidies for business which had to stay closed, measure SK-2020-25/896 (measures in Slovakia), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/SK-2020-25_896.html

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