Contrary to the hopes of the media, the government did not announce a foreseeable return to normality at its appearance yesterday, but presented new and further measures. Among other things, the wearing of face masks will gradually become compulsory in supermarkets from Wednesday.
As already presented in our previous mailing, we would like to provide you once again with an overview of the Hardship Fund. We would also like to offer you our support in applying for the Hardship Fund. An application for funding is possible until the end of 2020.
The Hardship Fund, with a volume of one billion euros for the time being, is a rapid first aid measure by the Federal Government for the acute financial emergency in the Corona crisis.
It helps all those self-employed people who now have no turnover to meet their living costs. The money is a one-time grant and does not have to be paid back.
1. entitled persons
Who can apply for support from the Hardship Fund?
The hardship fund is based on the entrepreneur. Membership of the Chamber of Commerce is not a prerequisite. The following groups are eligible to apply:
- One-person entrepreneur
- Microentrepreneurs as natural persons who employ less than 10 full-time equivalents and have a turnover or balance sheet total of max. 2 million euros.
- Employed partners who are compulsorily insured under the GSVG/FSVG
- New self-employed people such as lecturers and artists, journalists, psychotherapists
- Freelancers such as trainers or lecturers
Can managing GmbH shareholders also file an application?
Yes, the prerequisite is the existence of compulsory insurance under the GSVG. If there is compulsory insurance under the ASVG, no application can be made. The GmbH is not entitled to file an application.
Can shareholders of a GmbH/as a one-person GmbH also apply for funding?
GmbH shareholders who are not managing directors of the GmbH are generally not subject to compulsory insurance. Shareholders who are not co-directors of the GmbH are therefore generally not eligible to apply.
Under certain conditions, a co-partner may be subject to compulsory insurance under the GSVG as a new self-employed person, unless he/she is already compulsorily insured under the ASVG due to an employment relationship with the GmbH. If there is compulsory health insurance under the GSVG, the shareholder can also apply for it.
Can shareholders of a general partnership (OG) file an application?
Yes, the partners of an OG are entitled to apply. The prerequisite is the existence of compulsory health insurance with the SVS at the time of application. The company is not entitled to apply.
Can partners of a limited partnership (KG) file an application?
Partners with unlimited liability of a KG (= general partners) are eligible to apply. The prerequisite is the existence of compulsory health insurance with the SVS at the time of application. The company is not entitled to apply.
As a rule, limited partners of a KG (= limited partners) are not compulsorily insured with the SVS and are therefore not entitled to file an application. However, limited partners who are gainfully employed may, under certain conditions, be compulsorily insured as new self-employed persons, unless they are already subject to compulsory insurance under the ASVG due to an employment relationship with the limited partnership. If there is compulsory health insurance with the SVS, gainfully employed limited partners are also entitled to apply. If there is compulsory insurance under the ASVG, no application can be made.
2. eligibility criteria
What requirements must be met in order to receive funding from the Hardship Fund?
The legal basis for funding from the Hardship Fund is the corresponding directive.
This specifies which requirements one must demonstrably fulfil in order to receive funding. Basically, this includes self-employed persons who are affected by an economically significant threat from COVID-19.
The following points must be fulfilled at the time of application (applies analogously to freelancers):
- Legally self-employed operator of a commercial enterprise or a liberal profession (whether a chamber member or not)
- Establishment of a company by 31.12.2019 - Date: Registration of the trade licence or commencement of entrepreneurial activity
- Registered office or permanent establishment in Austria
- Hardship case: no longer able to cover running costs or officially ordered ban on entering or drop in turnover of at least 50% compared to the same month of the previous year.
- Upper limit: According to the Directive, in the last completed business year the income before taxes and social security contributions may amount to a maximum of 80% of the annual maximum contribution basis under social security law, which is 75,180 euros in 2020. 80% of this maximum contribution basis (=60,144 euros) corresponds approximately to the 33,812 euros net income (after taxes and social security). The net income value is to be taken from the last valid tax assessment (2017 or more recent). More information in the guideline.
- The upper limit (33,812 euros net income per year) based on the last available tax assessment notice is a simplification by the funding guideline issuer for safe and easier handling of the funding requirements.
- Lower limit: compulsory health insurance - as well as income of at least 5,527.92 euros p.a.
- No other monthly income above the marginal earnings limit (460.66 euros), e.g. from renting and leasing
- No multiple insurance in health and/or pension insurance
- No further cash payments from local authorities due to COVID-19
- The use of guarantees and short-time work (for any employees in micro-enterprises) AND the hardship fund is explicitly possible.
- If both the Hardship Fund and the Emergency Fund are used, then the amount of support from the Emergency Fund is reduced by the benefit already received from the Hardship Fund.
- No insolvency proceedings pending and no need for reorganisation - the URG criteria (equity ratio less than 8%, notional debt repayment period more than 15 years) must not have been violated in the previous business year
- Persons who receive benefits from unemployment insurance or statutory pension insurance at the time of application are excluded from funding.
Which year should be used to determine the lower limit of income?
A prerequisite for eligibility is compulsory health insurance and income of at least 5,527.92 euros per year. (low income limit 2020).
Your last available income tax assessment (2017 or more recent) must show income from self-employment and/or from business operations of at least 5,527.92 euros.
If you do not have a tax assessment notice, you have to estimate your income yourself. It does not matter from which year the tax assessment comes from.
How is the case of hardship defined?
For this to be the case, there must be an economically significant threat posed by COVID-19. This means: you are no longer able to cover your running costs, or you are affected by an officially ordered ban on entering the premises due to COVID-19, or you have suffered a drop in turnover of at least 50% compared to the same month of the previous year.
Proof at the time of submission is not necessary, but it must be declared under oath that an economically significant threat exists. False declarations may result in criminal penalties. Random checks will be made.
Instead of sales slumps, can order slumps also be claimed?
Companies that are obliged to keep accounts book turnover according to the principle of origin, income-expenditure accountants according to the inflow principle. Applications can only be made when the slump in orders is reflected in a lack of turnover.
This is because the hardship fund is based on the drop in turnover or personal living costs. According to the funding guideline, hardship is not to be assumed in the case of existing incoming payments/income from old orders. A later application is of course possible.
3. amount of the subsidy
How much funding is available?
The Hardship Fund provides a grant that does not have to be repaid later and consists of two phases:
- Phase 1 - Emergency aid (application possible since 27.3.)
- With a net income of less than 6,000 euros p.a.: Subsidy of 500 euros
- With a net income of 6,000 euros p.a. or more: Subsidy of 1,000 euros
- Applicants who do not have a tax assessment will receive a grant of 500 euros.
- Phase 2 (exact criteria and timing are still being worked out by the government):
- The grant will be a maximum of 2,000 euros per month for a maximum of 3 months.
- The allowance is based on the amount of income loss.
- The tax assessment notice must be available at least for the tax year 2017 or more recent.
4. disbursement
How are the funds allocated?
Sufficient funds are reserved for all eligible applicants. Applications will be processed in the order in which they are received. We expect a high number of applications. We will of course endeavour to process the applications as quickly as possible.
Further support services
The Republic of Austria will offer further financial support services for companies affected by COVID-19. If both the Hardship Fund and the Emergency Fund are used, then the amount of support from the Emergency Fund will be reduced by the benefit already received from the Hardship Fund.
The Republic of Austria will additionally also establish a support fund for artists affected by COVID-19. The information is provided by the responsible Federal Ministry of Arts, Culture, Public Service and Sport.
We are always available to provide you with further information or to apply for various subsidies on your behalf.
We hope you are well and stay healthy!
Yours sincerely,
TJP-Oaklins Group
TJP Austroexpert Steuerberatungsgesellschaft m.b.H.