Cabinet expands support package due to hard lockdown

The support measures for entrepreneurs are being broadened, the cabinet announced this morning. These include wage support (NOW) and the compensation to the fixed expenses (TVL).

Broader support is needed, according to the cabinet, because of the abrupt nature of the measures, entrepreneurs have had little chance to adapt to the changed situation, writes the cabinet to the House.

Less revenue loss needed

Initially, entrepreneurs had to have at least 30 percent loss of revenue to receive TVL. This will be reduced to 20 percent for the fourth quarter.

Because the aid is calculated quarterly, not all entrepreneurs who have to close these last weeks of the quarter achieve 30 percent loss of revenue. Now that threshold is lowered, more companies are expected to be eligible for the support. Entrepreneurs who have less than 30 percent loss of turnover can only receive support once this adjustment has been approved by the European Commission.

Wage support

The wage aid was subject to a maximum of loss of turnover. For determining how much wage support a company received, it was calculated with a maximum of 80 percent loss of turnover. If you had more revenue loss, you wont get more pay support. That limit is now being increased to 90 percent.

According to the cabinet, more entrepreneurs are facing a high loss of turnover due to this lockdown, and it is better to adjust the amount of wage support accordingly.

There will be no stock allowance for the hospitality and retail sector, as was paid out in the lockdown last year. According to the cabinet, it cannot be executed, and the money cannot be with companies on time. In addition, the hospitality industry can now switch to takeaway faster, and stores can use click and collect.

Self-employed

Income support for the self-employed is not extended. They do get longer to repay loans.

Self-employed people were already able to use a relaxed welfare benefit for income support. In addition, self-employed people can receive an income supplement to the social minimum, even if they have equity.

It does look at how much the partner earns, and whether the company is viable. The latter was not tested in previous versions of support for the self-employed. The cabinet is now calling on municipalities to deal with that viability test smoothly, so that the applications can be handled more quickly.

Long term

Several research institutes, such as the Centraal Planning Bureau and De Nederlandsche Bank, have previously pointed out the disadvantages of the support package. For example, De Nederlandsche Bank wrote yesterday in an analysis that it is not ruled out that infection waves continue to return.

โ€œThis requires further reflection on the design of the economy and society, so that extensive government support measures are no longer necessary and self-evident,โ€ wrote De Nederlandsche Bank in the report on economic developments and prospects.

The cabinet also sees those economic disadvantages of the support package, and writes that the aid policy cannot therefore be infinite. Companies must be able to adapt and that is why the cabinet is working on a long-term vision of the support package. At the beginning of 2022, before the end of the first quarter, more on this will become clear.