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Germany approves aid package for workers and small businesses

Germany has approved a series of measures to help low-income workers and small businesses avoid economic meltdown during coronavirus pandemic.

German government has passed an aid package to help low-income workers and small businesses bear the loses caused by coronavirus pandemic.

The heads of the CDU, CSU and SPD have agreed to increase short-term benefits for furloughed workers, extend the duration of unemployment pay-outs, and provide tax relief to suffering industries like catering.

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“The Federal Government must take further measures to cushion social and economic hardships and support recovery,” the leaders said.

Under the newly approved package, workers who have had their hours reduced by at least 50% will receive an increased payment of up to 77% of total net income after the fourth month of receiving benefits. Those still receiving benefits after seven months will receive between 80 and 87%. The current level of compensation is between 60 and 67%. Households with children will receive slightly more.

The reference period for unemployment benefit is extended by three months for those whose entitlement would end between May 1 and December 31, 2020

From July 1 VAT for the catering industry will be reduced from 19% to 7% between July 1, 2020 and June 30, 2021.

Small and medium sized companies may offset expected loses against tax prepayments already made for 2019.