In a time of crisis, the modern world is experiencing disruption unprecedented in most of our lifetimes. Not only is this disruption affecting our physical access to the world around us, but every area of our business and economic lives. As Germany continues to live through lockdown with an unknown time frame, we take a look at how freelancers and self employed people can make the most of lockdown.
Obviously much of our advice on this blog will relate to the immediate remedies available to you as a freelancer, because well, that’s probably the most urgent issue on your mind and rightly so. But we will also discuss some of the more practical business related tasks you can begin with. This is a new reality, and rather than a bottleneck your business cannot overcome, perhaps you can find your way to a practicable solution that is not just to survive this crisis, but to thrive after it.
State and Federal Support - What’s Available for Freelancers?
We have talked on the blog before about the lack of support for freelancers and self-employed people. This was of great concern as the measures of social distancing and business closures were continuing to escalate. However, at the time of writing a few support mechanisms have been announced. It was recently announced that there will be emergency aid measures for small businesses and solo self-employed people as well as for freelancers in the current year alone.
The package is aimed at small and very small companies with a maximum of five employees as well as freelancers and self-employed persons who "suffer particularly hard from the Corona crisis", as the Senate Chancellery announced on 26 March, 2020. The country wants to mitigate the negative effects, limit "the damage to the overall economy" and secure jobs.
The Federal Government will thus provide immediate financial aid in the form of grants to ensure the economic existence of the applicants and to bridge acute liquidity shortages. The funds can be used to pay for ongoing operating costs such as rents, loans for business premises, leasing rates and the like. Solo self-employed persons - self-employed persons without employees, individual artists etc. - and small businesses with up to five employees will then receive up to EUR 9,000 one-time payment for three months. Up to ten employees receive a one-time payment of up to EUR 15,000 for three months. The processing should take place electronically via the federal states or municipalities. Emergency aid still has to be approved by the Federal Council. The full announcement can be read here.
Further to this, there has been an ease of requirements for access to basic security. There are already some so-called "top-ups" among the solo self-employed and freelancers who have applied for and received basic security according to the Second Social Code (SGB II) (Hartz IV). Until June 30, 2020, access to basic security will be made easier; the period can be extended until December 31, 2020. While emergency aid and loans help the business financially, the basic security benefits the entrepreneur personally and secures, for example, the rent and the cost of living.
Do you have children to support?
Obviously, with the closure of schools and the complete stalling of the workplace and economy - families could be the hardest hit. Those who have to look after their children due to school or daycare closures and are unable to go to work are going to be protected against excessive loss of income. If working parents have to look after children under the age of 12 because care cannot be guaranteed elsewhere, and flexitime, overtime credits and vacation have been exhausted, they will have income replaced by the competent authorities. Access to the child supplement is also being simplified to help families quickly who have lost income due to the crisis. The child supplement supports families if their income is sufficient for their own livelihood, but not for that of the entire family. For new applicants, only the last monthly income is checked temporarily - instead of the income of the past six months, as is the case otherwise.