Third aid package for the corona crisis: ‘austere but more targeted’

Netherlands is in a deep recession and that raises many questions from businesses, entrepreneurs and employees. That is the government’s message with the third support package for everyone who has been severely affected by the corona crisis

EUR 11 billion will be allocated. Most of the schemes from the first two aid packages will remain in place, but will be cut back and phased out. The idea behind this is that companies that do not have a healthy economic future in the longer term should not be kept in the air with aid.

The following are some of the reasons for this

Unemployment

Entrepreneurs and workers have to adapt to the new economic circumstances, says the cabinet. After all, the economy will continue to shrink in the coming year and unemployment will continue to rise.

The government is therefore earmarking an extra 1 billion euro for guidance ‘from work to work’, retraining, combating youth unemployment and debt relief.

The three most important measures NOW, Tozo and TVL will be extended in a modified form until 1 July 2021.

Wage support

The salary support NOW (temporary emergency bridging measure for job retention) will be reduced and phased out in the third support package.

Until October 1, up to 90 percent of the salary will be compensated with a loss of sales of 20 percent. Subsequently, this drops to 80 percent, 70 and 60 until 1 July 2020. From 1 January, only companies with a loss of turnover of 30 percent are eligible.

The NOW 3 will cost 5.4 billion euros until 1 July 2021. Companies that receive the NOW and yet are forced to lay off their employees will no longer be cut back. However, they will be allowed to reduce salaries. But it remains forbidden to pay out dividends and bonuses.

Self-employed

The Tozo is also gradually being cut back, with the idea that self-employed people who have no financial future will have to adapt their work or look for a job.

The cabinet wants the Tozo to look more like the welfare. From 1 October, for example, it will be checked whether the applicant has more than 46,520 euros in savings, cash or shares. This does not include their own home or business premises, a pension scheme or business equipment.

From 1 July 2021, self-employed persons who still have financial problems in their municipality must apply for regular assistance for self-employed persons (Bbz)

Fixed loads

The allowance for companies that are temporarily unable to pay their fixed costs (ATVL) remains at a maximum of 50 percent of the fixed costs.

Well, the maximum reimbursement will increase from 50,000 euros to 90,000 euros as of 1 October. For the somewhat larger SMEs, the maximum reimbursement of 50,000 euros turned out to be too low. This scheme costs approximately 2 billion euros

The Cabinet recognises that abuse of all schemes is still possible because, for example, the UWV and the municipalities carry out retrospective inspections. However, more efforts are being made to detect fraud and abuse.

Cultural sector

The cultural sector has been hit above average by the corona crisis. Statistics Netherlands has calculated that production has fallen by 37.4 percent in recent months.

The sector can use the NOW, Tozo and TVL, but also gets extra money. There will be 482 million euros for the sector in municipalities and provinces, for local cultural projects and for innovation and new forms of public reach.

Other measures are:

Zoos that have to file for bankruptcy receive financial support so that the animals continue to be well cared for and taken care of until they are housed somewhere else, for example. The travel industry receives loans such as to the Stichting Garantiefonds Reisgelden and some smaller guarantee funds that compensate consumers if their travel organization goes bankrupt. The voucher system remains in place. Guarantees, guarantee funds and a payment scheme for accrued tax debts for entrepreneurs. Fiscal benefits, such as travel expenses deduction despite less travel to work and a mortgage break with retention of interest deduction. This year the public broadcaster will receive 19 million euros for extra costs incurred. The Cabinet will only take special measures for the events sector if this makes sense.