Government unveils aid package for self-employed

The Czech government has unveiled details of an economic aid package to help entrepreneurs hit by the coronavirus crisis and try to prevent massive lay-offs with a kurzarbeit scheme. Further measures, such as a moratorium on mortgages and loans, are expected to follow.

Photo: 3D Maennchen, Pixabay

In line with an aid package approved by the government on Tuesday self-employed persons who were hit by the restrictions stemming from the coronavirus crisis will receive a lump sum of 25,000 crowns from the state.

Entrepreneurs must apply for support and fulfil a number of conditions, for example a 10 percent year-on-year drop in sales in the first quarter and a minimum gross income of CZK 180,000 in 2019. Originally the government intended to pay entrepreneurs CZK 15,000 per month for the duration of the crisis. The support will be paid to the bank account stated on the completed form, which will be available by April 3.

Entrepreneurs who were forced to close operations due to the restrictive measures imposed, will also be able to apply for a postponement of rent for up to six months.

The government also approved the framework for a kurzarbeit scheme under which the state will pay two types of wage allowances for the period from March 12 to the end of April.

The state will provide 80 percent compensation for the wages of quarantined employees and the wages of workers in closed businesses, with a ceiling of CZK 39,000. In the case of production cuts due to the loss of workers, raw materials or a decline in demand, the compensation will cover 60 percent of the lost revenue, with a ceiling of CZK 29,000.

Further measures, such as a moratorium on mortgages and loans, are expected to follow.

On Monday, the government extended the ban on retail and on-premises sales until 11 April.

The Ministry of Finance expects the restrictions to last until the end of Q2. If they are in effect for longer, it will have to make further budget adjustments.