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How freelancers and small businesses can apply for coronavirus payments in Germany

Are you a freelancer, self-employed or have a small business? Here's where to apply for financial help if you're affected by the coronavirus pandemic in Germany.

Published: 30 March 2020 12:32 CEST
Updated: 6 April 2020 09:11 CEST
How freelancers and small businesses can apply for coronavirus payments in Germany
A shop in Berlin displaying a closed sign. Many businesses are affected by the corona crisis. Photo: DPA

The coronavirus pandemic is having massive economic consequences, with many people in Germany and beyond losing their jobs or facing financial difficulties.

In fact, experts estimated on Monday that social distancing measures to contain the coronavirus outbreak, which include closing non-essential shops and shutting down public life, will slash German 2020 economic output by 2.8 to 5.4 percent before a rebound next year.

“The German economy will shrink significantly in 2020,” the so-called “Wise Men” expert panel (SVR) said, with the exact size of the impact “depending on the extent and duration of health policy measures and the subsequent recovery, reported AFP.

The federal government and Germany's 16 states have vowed to provide cash to people affected.

Here's an overview of how to apply for it if you're a freelancer, self-employed or small business. States may offer different procedures and payments. Please contact your relevant authority for more information.

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How do you know if you’re eligible?

You must be registered with a German tax office and carry out work from a German permanent establishment/address or a German management headquarters.

Scope of immediate aid: self-employed people and companies with up to five employees can apply for a non repayable one-off grant of up to €9,000

Companies with up to 10 employees can apply for a grant of up to €15,000. Both sums are valid for three months.

Proof of cash difficulties: The applicant must confirm that he/she has encountered financial difficulties as a result of the coronavirus pandemic. Companies must not have already been in financial difficulties on December 31st 2019.

Application deadline: Applications must be submitted by May 31st 2020 at the latest.

READ ALSO: Buy from The Local's readers – help each other through tough times

What's the application procedure?

The Emergency Aid Programme (das Soforthilfe-Programm) involves a bureaucratic application procedure but aims to ensure a rapid payout.

The information provided in the application must be correct – false information may constitute fraud and lead to criminal prosecution. Applications can soon be submitted electronically to the responsible contacts in the state where you live.

It's important to note that you must submit your applications to the competent authority in your federal state.

Here's an overview of where to apply and who to contact for more information.

READ ALSO: Bundestag approves historic coronavirus rescue package

BADEN-WÜRTTEMBERG:

Application to and preliminary assessment by Industrie und Handelskammern (IHK) and Handwerkskammern (HWK), approval through L-Bank. For more information and to apply, visit this site.

BAVARIA:

Moderated by district governments and the City of Munich. For more information and to apply, visit this site.

BERLIN:

Investitionsbank Berlin (IBB). For more information and to apply, visit this site.

BRANDENBURG:

Investitionsbank des Landes Brandenburg (ILB). For more information and to apply, visit this site.

BREMEN:

BAB Bremer Aufbau Bank BIS Bremerhavener Gesellschaft for Investment Promotion and Urban Development mbH. For more information and to apply, visit this site.

HAMBURG:

Hamburg Investment and Development Bank (IFB Hamburg). For more information and to apply, visit this site.

HESSE:

Kassel Regional Council. For more information and to apply, visit this site.

MECKLENBURG-WESTERN POMERANIA:

Mecklenburg-Western Pomerania State Development Institute (LFI-MV). For more information and to apply, visit this site.

LOWER SAXONY:

Lower Saxony Investment and Development Bank – NBank. For more information and to apply click here.

NORTH RHINE-WESTPHALIA:

District governments of Arnsberg, Detmold, Düsseldorf, Cologne, Münster. For more information and to apply, visit this site.

RHINELAND-PALATINATE:

Investment and Structural Bank RP (ISB). For more information and to apply, visit this site.

SAARLAND:

Saarland Ministry of Economics, Labor, Energy and Transport. For more information and to apply, visit this site.

SAXONY:

Saxon Reconstruction Bank – Development Bank (SAB). For more information and to apply, visit this site.

SAXONY-ANHALT:

Saxony-Anhalt Investment Bank. For more information and to apply, visit this site.

SCHLESWIG-HOLSTEIN:

Investitionsbank Schleswig-Holstein (IB.SH). For more information and to apply, visit this site.

THURINGIA:

Thuringia Reconstruction Bank. The acceptance of applications and preliminary tests are also carried out by the IHKn and HWKn. For more information and to apply, visit this site.

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WORKING IN GERMANY

Four steps to take straight away after losing your job in Germany

Losing a job can be a nightmare situation for foreigners in Germany - but following these simple steps will get you back on your feet in no time.

Published: 10 September 2024 16:34 CEST
Updated: 15 September 2024 08:14 CEST
Four steps to take straight away after losing your job in Germany

In times of economic downturn, layoffs are far from unusual – but that doesn’t make it any more difficult for the people who find themselves suddenly left without work.

For foreigners in Germany, the situation is even more frightening. You may wonder whether your residence status is in jeopardy, how hard it will be to find another position, and whether you can support yourself while you look for another job.

Though it may be hard to think clearly at a time like this, following these four simple steps will set you in good stead to move forward – and hopefully, it won’t be long before another dream opportunity comes your way. 

1. Negotiate your terms 

Before signing or agreeing to anything, it’s crucial that you’re familiar with your rights and understand how much notice your employer has to give you and what kind of settlement you may be owed.

Generally, the rule of thumb is that you get half a month of severance for every year you worked at the company. That said, higher settlements can be negotiated in return for signing a termination agreement (Aufhebungsvertrag), so you may want to seek legal advice before settling. 

Even during a probationary period, your employer will also have to give you a certain amount of notice before your last working day. During the interim, you can either work for the company or be put on what is known as gardening leave in English, where you stay home but are paid as if you were working.

This can all be negotiated as part of a termination agreement, so you should think carefully about what works best for you and consider speaking to your labour council (Betriebsrat) or a legal specialist before making any firm decisions. You should also be aware that you have no obligation to sign any agreement and can legally dispute the layoff if you want to. 

READ ALSO: Can I get unemployment benefits in Germany if I quit my job?

2. Get all the necessary documents from your employer

Once the terms of the layoff are final, ensure that your employer gives you all the necessary documents you need to navigate the next phase of German bureaucracy.

The main two to think about first are the confirmation of work (Arbeitsbescheinung) and the confirmation of your holiday entitlement (Urlaubsbescheinigung).

The first can be sent to the Agentur für Arbeit (jobcentre) as proof of your last job and recent layoff, while the second will help your next employer calculate your vacation days for the rest of the year.

An Arbeitszeugnis, or German letter of reference

An Arbeitszeugnis, or German letter of reference. Photo: picture alliance/dpa/dpa-tmn | Zacharie Scheurer

On top of these documents, you’ll want to ask your employer for a letter of reference (Arbeitszeugnis), which is useful for finding a new job in Germany.

You should also keep hold of your last payslip and statement of earnings (Lohnsteuerabrechnung), which are helpful for tax purposes and may also be requested by the Agentur für Arbeit.

Speaking of which… 

3. Register as unemployed with the Agentur für Arbeit

As soon as you know that you are soon to be unemployed, you should register as a jobseeker with the Agentur für Arbeit. To get full unemployment benefits, you usually have to do this within three days of receiving your termination notice or at least three months before leaving.

Depending on what type of residence permit you’re on, you may or may not be entitled to long-term unemployment benefits (ALG II), but most employees are able to get unemployment insurance (ALG I), which covers a proportion of your former salary while you look for a new role.

It’s important to be a little bit careful here, as claiming long-term unemployment benefits (ALG II) can affect any future citizenship applications. Any severance pay you agree to can also result in you losing some months of unemployment benefits, so these are all factors you will have to consider while deciding on the best way forward. 

READ ALSO: What happens to your work permit if you lose your job in Germany?

4. Inform the immigration office 

If you’re on a residence permit that is linked to your job in some way, like a Blue Card or work visa, you’ll need to inform the immigration office about your change in circumstances as soon as possible.

This should be done in writing, and in German, within two weeks of receiving your termination notice.

You should include all relevant personal information, such as date of birth, residence permit type, and nationality, as well as the date of your final day at work. As proof of the layoff, you should also enclose a copy of your termination agreement or a letter from your employer. 

People enter the immigration office

For foreigners who move to Germany and settle in Berlin, a visit to the Berliner Landesamt für Einwanderung (LEA) is ultimately unavoidable. Photo: picture alliance/dpa | Britta Pedersen

In most cases, the immigration office will give you between 3 and 12 months to look for a new job. If they give you a shorter period, be aware that you may be able to negotiate an extension later on if you are struggling to find work through no fault of your own.

Above all, stay positive. Though it may feel like one door has closed, another one is sure to open. This being Germany, you may just have to wade through a sea of paperwork to get there.

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