Coronavirus: coalition wants to increase short-time benefits

The party leaders have struggled for a long time, but ultimately the coalition committee agreed in the evening on an increase in short-time benefits. In addition, the VAT for hotels and restaurants is to be reduced for a limited period.

The heads of the Union and the SPD want to raise short-time work benefits for workers particularly affected by the corona crisis. In addition, the VAT rate for food in the catering industry is to be temporarily reduced from 19 to seven percent. The leaders of both parties agreed on this at a meeting with Chancellor Angela Merkel (CDU) in the evening in Berlin. Overall, the coalition committee agreed on further aid of over 10 billion euros.

Due to the severe economic consequences of the Corona crisis, hundreds of thousands of people are on short-time work. The Federal Employment Agency replaces part of the lost net income: 60 percent for childless employees and 67 percent for employees with children. Now, the short-time allowance for those who are currently working at least 50 percent less is to be 70 percent from the fourth month of receipt (or 77 percent for households with children) and 80 percent (or 87 percent for households) from the seventh month of receipt with children) of the flat-rate net wages, at the latest until December 31, 2020.

Kramp-Karrenbauer praises compromise

For employees on short-time work, the existing additional earnings opportunities with an additional earnings limit up to the full amount of the previous monthly income will be opened to all professions from May 1 to December 31.

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CDU boss Annegret Kramp-Karrenbauer has expressly praised the agreed improvements in short-time benefits after the tough negotiations. It was “very intensive negotiations”, which involved difficult detailed questions, she said early Thursday morning after the more than seven-hour consultation in Berlin. But she was “very happy and satisfied with the result”.

SPD chairman Norbert Walter-Borjans said important decisions had been taken for companies and workers who were suffering from losses. It was worthwhile to sit together longer than expected and to discuss considerably controversially.

VAT reduction for the catering trade

Also the catering trade according to the will of the coalition further help. It is particularly affected by the Covid19 crisis. The value added tax for food in restaurants will therefore be reduced from July 1 to June 30, 2021 at a reduced rate of 7 percent. As an immediate corona measure, small and medium-sized companies are to receive additional liquidity by means of simplified loss offsetting following the decision of the coalition leaders.

CSU boss Markus Söder spoke of “thick boards” that had to be pierced. Although he would have liked a longer duration for the lowering of the value added tax for the catering trade, he was satisfied with the “incentive program” found. In total, the industry will be relieved of around four billion euros.

Students should be better equipped

In order to improve the technical equipment of schoolchildren in the Corona crisis, the federal government also wants to make 500 million euros available for teaching on the home computer. Pupils in need are to receive a grant of 150 euros for the purchase of appropriate equipment.

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The consultations took place in the international conference room of the Chancellor’s Office because of the spacing rules necessary in the pandemic and, due to differences in content, took almost eight hours longer than originally planned. In addition to the party and faction leaders of the CDU, CSU and SPD, foreign ministers Heiko Maas and finance minister Olaf Scholz (both SPD) also attended the meeting in the chancellery.


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