Overview of the latest development in government support for businesses

In April, businesses and trade license holders were eligible for two types of state aid for keeping jobs:

• 3A – wage compensation up to 80% of average wage (with cap at EUR 880) per each employees to whom the employer is not able to assign work due to impediments to work on the part of the employer (Section 142 paragraph 4 of the Labour Code), that is, when the company does not have any work to be assigned to the employee who therefore needs to stay at home;
• 3B – lump-sum contribution to compensate for one part of wage costs per each employee depending on the decline in turnovers.

Following the implementation of the latest measures to prevent spreading of Covid-19 as of Thursday, 15 October 2020, not only many establishments and facilities had to be closed down (such as fitness centres, gyms and wellness centres, public swimming pools and saunas) or their operation was strictly limited (gastronomic facilities and hospitality segment may only serve meals using pass-through windows or serve the customers at outdoor terraces). At the same time, the government also introduced a new support scheme titled “Prvá pomoc+” (In English: First Aid+). It is estimated that businesses and self-employed will be able to draw state aid amounting to EUR 200 million every month under the scheme.

What has been changed in state aid scheme as of 1 October?

• Compared to spring 2020, caps (upper limits) on the state aid are increased by 50%.
• Under the measures 1 and 3A, the eligible entity will be able to apply for a contribution amounting to 80% of the total costs of labour (TCL a.k.a. super-gross wage), i.e. not only 80% of the gross wage. The cap on the monthly contribution to be drawn under the Kurzarbeit scheme will be increased from EUR 880 to EUR 1100.
• In case of the measure 3B, the state aid for entities with a decline in turnovers will increase to the maximum of EUR 810.
• For the self-employed entities, the state aid will also be increased under the measure no. 2 from the maximum of EUR 540 to EUR 810 per month and under the measure 4A and 4B from EUR 210 to EUR 315 per month.

Prvá pomoc+ applies from 1 October 2020 and it should be operational until the end of 2021 if necessary. The first application for state aid under the Prvá pomoc+ scheme for the whole of October can be submitted in November. One should not forget that the prerequisite for drawing of state aid under 3A is to have employees with impediments to work. In case the measure 3A under the Prvá pomoc+ scheme is the most advantageous for businesses, it is necessary to formally institute (or possibly plan for) impediments to work as quickly as possible.

PLEASE NOTE: Prvá pomoc+ scheme allows for combination of several forms of state aid: companies may apply for the contribution for 80% of total costs of labour as well as the contribution based on a decline in turnover.

Also the entities active in culture and entertainment, sportsmen and sportswomen, hotel owners and other establishments that were ordered to close down will be eligible for the compensation under the Prvá pomoc+ scheme. In case of concurrent income (i.e. the entity has two parallel sources of income) the state aid will be reduced by the existing additional income. The contributions can be drawn from several ministries of the Slovak government and may be combined.

Contributions for employers including the self-employed (SZČO in Slovak) who are employers

Contributions for the self-employed (SZČO in Slovak) including concurrent income from agreement to perform work

COVID additional payment

Another measure under the Prvá pomoc+ scheme is the COVID additional payment offering the compensation for sick leave allowance approximately in the amount of 100% of net wage. Individuals eligible for this type of contribution:

• Employees who fall sick at work while providing care to other people
• Medical personnel and employees of social care service facilities

No additional detailed information has been provided on this scheme so far.

Domestic tourism

Any entity with a decline in turnovers by more than 40% (when compared to the identical period in 2019) may apply for state aid in tourism industry. The application may be submitted by restaurants, hotels, pensions, public swimming pools, tourist guides and other entities. They will receive contribution amounting to 4 to 10% of their turnovers in 2019. Applications for this type of state aid must be submitted on the website of the Ministry of Transport by way of the online form (yet to be made accessible).

No additional detailed information has been provided on this scheme so far