India: Government Support Schemes To Fight COVID-19 – Across The Globe

The influence of COVID-19 on employees, employers and businesses is persistently evolving – from supply chain disruption to order cancellations; from sick pay calculation to changing tax and accounting deadlines. A list¹ of the latest schemes implemented by various Countries (as on April 15, 2020) around the globe is provided herein below.

Please note, that the following is not an exhaustive list, however, attempts to cover most of the schemes related to Economy, employment and businesses have been made.

CANADA

Employment insurance²

Service Canada is waiving the one-week waiting period to claim Employment Insurance (EI) sickness benefits and waiving the requirement to provide a medical certificate to access EI sickness benefits.

They have introduced the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks. This flat-payment Benefit would be administered through the Canada Revenue Agency (CRA) and provide income support to: Workers, including the self-employed, who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits, and workers, including the self-employed, who are taking care of a family member who is sick with COVID-19, such as an elderly parent, but do not quality for EI sickness benefits.

Income support for workers³

For Canadians without paid sick leave (or similar workplace accommodation) who are sick, quarantined or forced to stay home to care for children, the Government is:

• Waiving the one-week waiting period to claim Employment Insurance (EI) sickness benefits.
• Introducing the Emergency Care Benefit providing up to $900 bi-weekly, for up to 15 weeks

For Canadians who lose their jobs or face reduced hours, owing to COVID-19, the government is:

Introducing an Emergency Support Benefit delivered through the CRA to provide up to $5.0 billion in support to workers who are not eligible for EI and who are facing unemployment

Implementing the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hour as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process

Essential Worker Retention Incentive Program⁴

The government introduced an Essential Worker Retention Incentive Program, which will provide a $100-a-week benefit for low-income earners working full-time or part-time in essential services.

Employers flexibility Canada Emergency Wage Subsidy⁵

The proposed CEWS would apply at a rate of 75 per cent of the first $58,700 normally earned by employees – representing a benefit of up to $847 per week, per employee. The program would be in place for a 12-week period, from March 15 to June 6, 2020. Employers of all sizes and across all sectors of the economy would be eligible, with certain exceptions including public sector entities. To measure their revenue loss, it is proposed that all employers have the flexibility to compare their revenue of March, April and May 2020 to that of the same month of 2019, or to an average of their revenue earned in January and February 2020.

Temporary wage subsidy⁶

The government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees' remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.

UNITED STATES

Coronavirus relief package⁷

Bipartisan Families First Coronavirus Response Act will provide free testing; paid emergency leave for workers including a temporary coronavirus-related sick leave benefit paid by employers with fewer than 500 workers; and unemployment insurance for those impacted by coronavirus including $1 billion in emergency grants to help states expand unemployment insurance benefits. Also, the new coronavirus economic stabilization law provides about $300 billion for cash payments and $260 billion for enhanced unemployment assistance. It also provides $100 million through Reed's short-time compensation (STC) provision, which is a layoff prevention program for businesses and workers known as work sharing. It also includes help for small businesses and employee retention payroll tax credits to keep more people on the job earning a steady paycheck. It also provides direct payments of $1,200 to most individuals making up to $75,000, or $2,400 for couples making up to $150,000.Senator Reed added a $100 million work share provision to the CARES Act.

Employee retention credit⁸

The Employee Retention Credit is designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted.

Establishment of facilities to support American workers, households, and businesses⁹

Three new facilities will provide liquidity to the financial system and support the flow of credit to American workers, households and businesses including the Term Asset-Backed Securities Loan Facility (TALF), Primary Market Corporate Credit Facility, and Secondary Market Corporate Credit Facility. They will likely provide up to $300 billion in new financing.

Federal Unemployment Benefits¹⁰

The FPUC program will provide an additional $600 per week to individuals who are collecting regular Unemployment Compensation (UC), Pandemic Emergency Unemployment Compensation (PEUC), Pandemic Unemployment Assistance (PUA), Extended Benefits (EB), Trade Readjustment Act (TRA), and Disaster Unemployment Assistance (DA). The Department has already begun implementing the FPUC program for regular UC claimants. The $600 will be added to all eligible weeks of benefits retroactive to March 29, 2020 and continuing until July 31, 2020.

FRANCE

Partial unemployment scheme¹¹

For companies to place their employees in partial unemployment, the government will help companies pay employees. Companies will pay compensation equal to 70% of gross salary (around 84% of the net) to its employees. Employees with minimum wage or less are 100% compensated. The state will fully reimburse the companies for salaries up to 6,927 euros gross monthly, ie 4.5 times the minimum wage.

Deferral of rental payments and utilities¹²

The President announced the postponement of payment of rent, water, gas and electricity bills for small businesses.

Deferral of tax payments¹³

Businesses can ask the public accountant for a settlement plan to spread or defer the payment of tax debt and businesses can request, in the most difficult situations, a remission of direct taxes (profit tax, territorial economic contribution, etc.).

Support plan for French exporters¹⁴

The granting of state guarantees through Bpifrance for sureties and pre-financing of export projects will be reinforced to secure the cash flow of exporting companies. The guaranteed quotas may be increased to 90% for all SMEs and mid-caps. The period of validity of the pre-financing guarantee agreements export will be extended for six months.

Financial stimulus for start-ups¹⁵

France will roll out a €4 billion ($4.33 billion) liquidity support plan for start-ups in the wake of the coronavirus outbreak.

Free business mediation services¹⁶

Business mediation services are available for free to companies to come up with a confidential action plan for disputes.

Launch of online tool¹⁷

The Government has implemented support measures for businesses and has launched a website, info-entreprisescovid19.economie.gouv.fr, to help companies understand the benefits available and to answer all questions.

GERMANY

Adjusting advance payments and suspending tax penalties¹⁸

Companies, the self-employed and freelancers can also have their advance payments adjusted for income and corporate tax. The same applies to the measurement amount for the purposes of business tax prepayments.

Enforcement of overdue tax debts should be waived by the end of the year. Default surcharges that are legally incurred during this period should be waived. This applies to income and corporate tax as well as sales tax.

Bonuses are tax-free¹⁹

Bonuses given to employees up to €1,500 are now tax and social security free this year.

Economic Stabilization Fund²⁰

The Federal Government launched a large-scale economic stabilization fund: that consists of €400 billion euros state guarantees for liabilities, €100 billion euros for direct state investments, and €100 billion euros for funding from KfW.

With a volume of up to €600 billion, thus cushioning the economic impact of the pandemic on companies whose existence is of considerable importance for Germany or the job market. It also applies to important smaller companies and companies in the field of critical infrastructure. Also, intended to eliminate liquidity bottlenecks, support refinancing on the capital market and, strengthen the capital base of companies.

Emergency aid for self-employed and small businesses²¹

To ensure liquidity for small businesses and the self-employed, the federal government is providing €50 billion to provide unbureaucratic emergency aid for small businesses, the self-employed and freelancers and provide a one-time payment for three months – depending on the size of the company, up to €9,000 (up to five employees / full-time equivalents) or up to €15,000 (up to ten employees / full-time equivalents).

Short-term work allowance legislation²²

Legislation is being fast-tracked to facilitate access to short-term work allowances for companies where a minimum of 10% of the workforce is affected.

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Footnotes

1. https://www.tmf-group.com/en/news-insights/coronavirus/

2. https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html

3. https://www.canada.ca/en/department-finance/news/2020/03/canadas-covid-19-economic-response-plan-support-for-canadians-and-businesses.html

4. https://www.ctf.ca/CTFWEB/EN/Pages/Covid19.aspx

5. https://www.canada.ca/en/department-finance/news/2020/04/government-provides-further-flexibility-for-employers-to-access-the-canada-emergency-wage-subsidy.html

6. https://www.canada.ca/en/department-finance/news/2020/03/canadas-covid-19-economic-response-plan-support-for-canadians-and-businesses.html

7. https://www.reed.senate.gov/news/releases/from-1200-stimulus-payments-to-enhanced-unemployment-to-500-per-child-reed-outlines-coronavirus-economic-rescue-benefits-for-riers

8. https://home.treasury.gov/news/press-releases/sm962

9. https://home.treasury.gov/news/press-releases/sm951

10. https://www.mass.gov/news/massachusetts-announces-initial-implementation-of-new-federal-unemployment-benefits-from-0

11. https://www.economie.gouv.fr/coronavirus-soutien-entreprises

12. https://www.economie.gouv.fr/coronavirus-soutien-entreprises

13. Ibid

14. https://www.economie.gouv.fr/files/files/PDF/2020/Support_plan_for_French_exports.pdf

15. https://minefi.hosting.augure.com/Augure_Minefi/r/ContenuEnLigne/Download?id=B26DE608-0E86-4287-8289-230D50A26F16&filename=128%20-Plan%20d%E2%80%99urgence%20de%20soutien%20d%C3%A9di%C3%A9%20aux%20start%20up.pdf

16. Supra, 1

17. https://minefi.hosting.augure.com/Augure_Minefi/r/ContenuEnLigne/Download?id=902F84E6-02BA-4C45-869D-B3F9416FCC92&filename=2097-1001%20-%20Covid19%20-%20Le%20Gouvernement%20renforce%20le%20dispositif%20d%E2%80%99information%20des%20entreprises.pdf

18. https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Schlaglichter/Corona-Schutzschild/2020-03-19-steuerliche-Massnahmen.html

19. https://www.bundesregierung.de/breg-de/suche/sonderzahlungen-bis-1-500-euro-jetzt-steuerfrei-1739240

20. https://www.bmwi.de/Redaktion/DE/Coronavirus/coronahilfe.html

21. https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Schlaglichter/Corona-Schutzschild/2020-03-13-Milliarden-Schutzschild-fuer-Deutschland.html

22. https://www.bundesregierung.de/breg-en/news/kabinett-kurzarbeitergeld-1729898

Originally published April 23, 2020

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