COVID-19 Deferral of social security contributions
Applying for a deferral of social security contributions ought to be a measure of last resort for businesses trying to weather the coronavirus crisis and maintain jobs. Germany’s National Association of Statutory Health Insurance Funds, the Spitzenverband Bund der Krankenkassen, has announced that it will be quickly and unbureaucratically processing applications for deferral of payable social security contributions.
The application merely has to be accompanied by a credible statement explaining that significant financial damage has been incurred as a result of the coronavirus pandemic, e.g. in the form of a documentable decline in turnover.
Employers are currently able to take advantage of this for the months of March, April, and May.
We at the commercial law firm MTR Rechtsanwälte believe that for the purpose of reducing the burden on businesses, priority ought to be given to taking advantage of the current provisions on short-time allowance. Ultimately, the aim should be to prevent businesses from being saddled with an insurmountable mountain of debt at the end of the crisis.
Key details in connection with a deferral of social security contributions:
- No deferral interest is charged
- Late payment penalties and reminder fees are not envisaged
- There is no need to provide security
The package is equally relevant to self-employed individuals who have voluntarily chosen to become members of a statutory health insurance fund. They are also able to benefit from the support provided by the Association of Statutory Health Insurance Funds. Of course, it makes sense before considering a general deferral to ask your health insurance fund about a reduction in contributions based on a drop in profits.
Experienced lawyers can offer advice.