Coronavirus: extension and expansion of emergency package for jobs and economy

Note: the date of this news item is May 20, 2020. Read the current information about the Dutch approach and measures against the coronavirus.

The ministers and state secretaries of Economic Affairs and Climate Policy (EZK), Finance, and Social Affairs and Employment (SZW) announced the package to the House of Representatives on Wednesday. These measures follow the first emergency package (March 17) and various interim economic schemes with which nearly one in five Dutch workers have now been supported. Hundreds of thousands of companies have already used one or more schemes.

The governments financial support for entrepreneurs and workers remains very large. However, not all layoffs and bankruptcies can be prevented. Recovery in some sectors may also take a long time. Limiting economic damage is a shared responsibility of society and government. The changes that the Dutch must go through together are permanent and drastic. This new emergency package provides them with targeted backing to adapt in the coming turbulent period. Some companies must shrink or even disappear, but new opportunities also arise.

All new or extended schemes, with possible adjustments, can be found in the Letter to Parliament Emergency Package 2.0. Below are the main announcements of the cabinet in the new emergency package for which more than 13 billion euros has been budgeted.

SME entrepreneurs in sectors including hospitality, recreation, events, fairs, stages, and theaters receive - in addition to the wage cost compensation (NOW) - a tax-free compensation from the Ministry of EZK to pay their fixed material costs. Companies receive compensation for their fixed costs up to a maximum of 20,000 euros for the next three months, depending on the size of the company, the amount of fixed costs, and the degree of turnover loss (at least 30 percent). One billion euros is available as compensation for these companies where more than 800,000 people work. Eligible are the affected sectors from the TOGS scheme.

An entrepreneur expecting at least 20% turnover loss can apply from July 6, 2020, for wage cost compensation at UWV for June, July, and August. This allows companies to continue paying their staff. The extended NOW scheme uses the same compensation system, but the new scheme also contains changes.

The fixed (lump sum) surcharge is increased from 30 to 40 percent. This means NOW also contributes to other costs than wage costs. The reference month for the wage sum is March 2020. Additionally, in the ongoing NOW scheme, March is also taken as a starting point if the wage sum in the months March-May is higher than in January-March. This is important for seasonal companies. Furthermore, a company using NOW may not distribute profits to shareholders this year, pay bonuses to the board and management, or buy back own shares.

In NOW 2.0, the correction on the subsidy for dismissal remains, but the subsidy is no longer further reduced for economic dismissal. Companies declare in the new NOW application that they consult trade unions if they want to apply for economic dismissal for more than 20 employees. This aligns with collective dismissal regulations. The legal protection in dismissal remains in force.

Employers applying for NOW are required to encourage their employees to participate in retraining and reskilling. Employers must provide a declaration about this when applying for NOW 2.0. To support initiatives from social partners, the cabinet allocates 50 million euros via the crisis program NL leert door, enabling people from July to follow free online training and development advice to adapt to the new economic situation.

The cabinet extends the relaxed scheme to support self-employed entrepreneurs including freelancers, so they have a greater chance to continue their business. Self-employed can receive additional income support for living expenses from their municipality. This supplements income up to the social minimum until the end of August 2020 and does not have to be repaid.

The extended scheme includes a partner income test. This means only households with income below the social minimum can claim compensation for living expenses. This way, support for living expenses is targeted at guaranteeing the social minimum at household level.

Support is also possible in the form of a loan (maximum €10,157) for working capital, at a reduced interest rate. Self-employed are asked in the extended scheme to declare that their company is not in suspension of payment or bankruptcy.

For dismissed flexible workers who do not meet the conditions for unemployment or social assistance benefits, the cabinet is working on a temporary and feasible solution at the request of the House of Representatives. The Minister of Social Affairs and Employment will inform the House separately today.

The period in which affected entrepreneurs can apply for tax deferral is extended until September 1, 2020. Any penalty fines for late payment do not have to be paid. The tax interest and collection interest for all tax types are reduced to 0.01% until October 1, 2020. Other tax measures, such as easing the hours criterion for freelancers and the payment pause for mortgage obligations, are also extended until September 1, 2020.

Entrepreneurs receive three months deferral of payment immediately upon first application. For those three months, they only have to submit one request (for deferral of all tax types). Entrepreneurs can also apply for deferral for a longer period than three months. It is important that as much money as possible remains in the companies. To guarantee this, entrepreneurs requesting deferral longer than three months must declare that they do not distribute dividends and bonuses or buy back own shares.

The extra, expanded, or more accessible credit provision and guarantees to small and medium-sized companies, startups, and scale-ups from the first emergency package continue. These companies also keep or gain access to financing through banks. This concerns the corona modules of the SME Guarantee Scheme (BMKB) and the Business Financing Guarantee Scheme (GO), the new Small Credit Corona Guarantee Scheme (KKC), and the increased budget of the SEED Capital Scheme.

The Corona Bridging Loan (COL), which contributes to improving the liquidity position of innovative companies (startups and scale-ups), receives a second tranche of 150 million euros due to the large number of applications submitted.

Entrepreneurs apply for credit schemes with their credit provider, for example a bank. The wage cost compensation scheme (NOW) runs via the UWV and support for self-employed entrepreneurs (TOZO) via their own municipality. Fixed Costs Compensation for SMEs is opened via RVO. For tax measures, entrepreneurs can go to the Tax Authorities Business via https://www.belastingdienst.nl/wps/wcm/connect/en/entrepreneurs/.

For other corona questions, companies can look at Government.nl/emergency-package or the website of the Chamber of Commerce: https://kvk.nl/corona. If your question is not answered, call the advice team at 0800-2117.