The Government has put in place its mechanisms to compensate restaurants, bars and pubs that were forced by law to close due to the restrictions imposed to prevent the spread of the coronavirus. The mandatory closure lasted almost two months and was lifted on June 1.
Food and beverage service sector businesses can now receive support for job retention and the re-employment of employees once their activities resume, along with a compensation for the restrictions on their activities due to Covid-19. The amount of support and compensation depends on the company size and the scope of business.
Two aid mechanisms
The restaurant support model is made up of two complementary components. The first part supports businesses in ensuring job retention and re-employing their employees, while the second part compensates businesses for the restrictions on their activities and supports them in managing their inflexible costs.
According to the Ministry of Economic Affairs, this support and compensation will be granted by the Keha Centre. The application channels for job retention and re-employment support were open on 5 June 2020. Entrepreneurs will find the instructions on the Keha Centre website.
However, businesses receiving compensation through the mass payment do not need to apply for it separately. Instead, the amount of compensation is calculated based on information received from the Tax Administration. Restaurant owners can also visit the Keha Centre website to find out if their business is covered by the mass payment.
Compensation for the restrictions:
- The amount of the compensation is based on the decrease in the business’ sales in April 2020 compared to the average sales in April–May 2019 or January–February 2020. The period that is most favourable for the business will be automatically selected as the reference period.
- The compensation can be no more than 15% of the sales decrease, nor can it exceed 500,000 euros.
- The compensation will be paid to companies mainly without the need for an application, in the form of a mass payment based on company-specific VAT information received from the Tax Administration. In this case, the business owner does not need to take any action on their own. For companies that cannot be included in the mass payment, the compensation will be granted upon application.
- The compensation will be paid in two instalments to the companies that will receive it in the form of a mass payment. Government said the first instalment "will be paid as soon as possible," while the goal is for the final instalment to be paid at the end of June.
- The amount of the compensation is not affected by the other support received by the business. Any coordination between different forms of support will be assessed separately.
Support for re-employment:
- The amount of support for re-employment will be 1,000 per employee. The maximum number of employees eligible for support is that existing in the enterprise on a full-time basis in February 2020, including through temporary agencies or subcontracting. The total amount of support granted to a single company or group may not exceed 800,000 euros.
- Support will be paid for those employees to whom the company will pay a total of 2,500 euros for the period from 1 June to 31 August 2020 or for whom it will pay a total of 4,500 euros per employee to a temporary agency or subcontractor during that period.
- The granting of support for job retention and re-employment does not depend on the type of employment relationship of the employee.
- The support will not be granted to cover the wage costs of workers for whom other public aid has already been granted.
- This support is granted on application. The support will be paid as soon as the KEHA Centre has made a decision to grant it.
Businesses in the food and beverage service sector were required by law to keep their indoor and outdoor premises closed between 4 April and 31 May 2020.