7 mearsures for employees, companies and the self-employed

Tuesday, 31. March 2020

On Sunday,  March 29, 2020, Igor Matovič, the Prime Minister of the Slovak Republic and his key coalition partners have revealed 7 measures to mitigate the impact of the Covid-19 pandemic for employees, companies and the self-employed.
The parliament will decide on all 7 measures in a shortened legislative procedure on Tuesday, March 31.,2020. Based on the calculations of Eduard Heger (Minister of Finance of the SR), direct aid will amount to 1 bn. EUR per month and bank guarantees to a monthly 500 mil. EUR.

1. The state will pay 80% of the employee’s salary in companies that had to close their facilities
Only those employers will be eligible for this contribution, who were forced to close their operations due to the Covid-19 pandemic. The state will pay 80% of the gross salary of employees, the contribution is limited to a maximum of 1100 EUR per employee and 200 000 EUR per employer.
On the press conference, Milan Krajniak (Minister of Labour) stated that the job retention contributions should be paid as of 15.4.2020, based on the order of receipt of employer applications. The basic condition for this measure is to keep the supported position at least 6 months after the contribution ceases.

2. Contributions for the self-employed and employees that have recorded a drop in company revenues
With a 20% drop of revenues, the government will contribute 180 EUR, if they decrease by 40% the state will contribute 300 EUR, if they sink by 60% the state will offer 420 EUR and if the plummet by 80% the state will provide 540 EUR per self-employed person or employee.
In a political debate, Milan Krajniak pointed out that the revenues will be compared to the same period of the previous year, and will be based on a solemn statement by the entrepreneur. Similar to the previous measure, these contributions should also be paid as of 15.4.2020 and will be limited to 800 000 EUR per company per year.
In other statements, he also added that the first two measures should affect 800 000 employees and 200 000 self-employed people.

3. Bank guarantees amounting to 500 million EUR
The government is in continuous negotiations with banks on state-backed bank guarantees. These should amount to half a billion EUR per month, allowing for commercial banks to lend money to businesses in more favorable conditions
4. Sick pay & Payments for nursing a child
The employee's entitlement to sick pay will be covered by the Social Insurance Agency from the first day of temporary incapacity caused by compulsory quarantine or isolation due to COVID-19. The sick pay will amount to 55% of the daily assessment base. So far, it was the employers´ duty to cover the sick pay during the first 10 days of incapacity, whilst during the first 3 days, it was equal to 25% of the employee's daily assessment base.

Additionally, it has been proposed to extend the period of payments for nursing a child from the age of 10 years to 11 years, or up to 18 years of age for children with long-term adverse health conditions. At the same time, the length of the payments for nursing will be adjusted originally from ten days, respectively twenty days, until the end of the whole period of quarantine, isolation or closure of the school and pre-school facilities and will amount to 55% of the daily assessment base. Parents will have the possibility to alternate during nursing.
The amendment to the Act on Social Insurance was already adopted by The Parliament of the Slovak Republic in a shortened legislative procedure on Wednesday, 25th March 2020.
5. The payment of the employer’s contributions will be postponed for companies with a revenue drop by more than 40 percent.
6. Income tax advance payments will be postponed for companies with a revenue drop by more than 40 percent.
Taxpayers can postpone income tax advance payments when their revenues drop by 40% on a monthly basis. Richard Sulík (Minister of Economy) stated that the postponing will be possible for a 3-month period (July-September 2020). Entrepreneurs will start paying advanced payments as of October 2020. Postponed advanced payments will be settled in the annual tax clearance for 2020.
7. Loss carryback for companies as of 2014 (including)
Companies will be able to include loss carryback as of 2014 (including) that they have not included so far, without any limits, meaning that one can incorporate the entire carryback at once. These new rules should be in place for the 2019 tax declaration, which has been postponed to the end of June 2020.