Feeling the financial squeeze of Lockdown Light? Enter “November-Hilfe”, a flat-fee designed to compensate you for the revenue you lost this month. It’s not to be confused with Soforthilfe or Überbrückungshilfe. Red Tape Translation will take you through what it is, whether you’re eligible and how to apply.
By Katie Kruse
What is November-Hilfe?
November Hilfe is government financial support covering partial loss of revenue for the month of November 2020 due to the Lockdown Light measures. It is paid in a lump sum and compensates 75% of the November revenue you were expecting. In most cases, your revenue from November 2019 is taken as a reference point.
Who is eligible?
Any business, company, freelancer, society/club or organisation directly affected by temporary closures due to Lockdown Light is eligible to apply.
What does directly affected mean?
Either your business was closed down completely due to Lockdown Light, or you can prove that 80% of your revenue comes from businesses that were affected by Lockdown Light (e.g. the majority of your clients were forced to close their businesses during Lockdown Light and thus couldn’t pay you).
I own a restaurant and am trying to bridge the gap with a pick-up and delivery service. Am I still eligible?
According to the Federal Ministry of Economics, restaurateurs who have continued to remain open during Lockdown Light measures by providing a pick-up/delivery service are also eligible to apply if they find they are generating less revenue than usual. There are special rules about how sales generated from takeaways are offset – you can find out more here.
How much do I stand to receive?
Companies directly affected by Lockdown Light will receive 75% of their average weekly earnings in compensation per week of closure. In most cases, the average weekly earnings from the month of November 2019 will be used as a basis for the calculation.
November 2019 was a bad month for revenue, that doesn’t seem fair.
If you are a solo-freelancer or artist and generated no or little revenue in November 2019, you can use your average weekly revenue for the whole of 2019 as a basis for the calculation instead.
What if my business didn’t exist back in November 2019?
For businesses founded after November 2019, the revenue from October 2020 will be used as a reference point for the calculation instead.
Do I need a tax advisor to apply?
Not necessarily. If you are a solo-freelancer and the amount you’re requesting is under 5000€, you will not need a tax advisor to apply. A simplified application process is being developed as we speak. The application will appear on the Überbrückungshilfe platform in the last week of November, probably on 25.11.2020.
Do I need to pay the money back?
No. November-Hilfe is a government grant and will not need to be paid back.
Can I still apply if I’m receiving ALGI or ALGII?
We don’t know yet.
The second round of Soforthilfe was only for fixed business expenses. Will November-Hilfe be the same?
While the government has mentioned that they want to help businesses cover their fixed expenses specifically, there is no mention of them controlling where the money goes. Germany’s Minister for Economic Affairs, Peter Altmaier, was quoted in the Süddeutsche Zeitung as saying that the aid will be „pauschal gewährt, so dass der Soloselbstständige sie auch für seinen persönlichen Lebensunterhalt verwenden kann“ (the aid will be “granted as a flat-fee, so that solo self-employed people can also use the money to cover their personal living costs.”)
Will I have to pay income tax on November Hilfe?
This isn’t yet clear, but as Soforthilfe payments from the Investitionsbank Berlin do have to be declared as income in your 2020 tax declaration, it is likely that November-Hilfe will also be taxable income.
When and how can I apply?
You’ll be able to apply electronically in the next couple of weeks, most likely from 25.11.2020, via the Überbrückungshilfe online platform. Rest assured that as soon as it’s possible to apply, we’ll get to know the application process so that we can assist you using Life Admin. Watch this space for more information in the next fortnight.
How long will it take before the funds are paid out?
The first payments should be disbursed at the end of November.
What about the future? Is there anything else coming?
Yes, Überbrückungshilfe III is currently being developed to provide long-term support for freelancers. However, up until now, Überbrückungshilfe could only be used to cover business expenses. In a recent press conference, Altmaier stated that they have heard calls from the entertainment industry and acknowledged that most artists don’t have much in the way of business expenses, yet they still need more support than just social welfare.
KfW is also offering loans with favourable conditions to solo freelancers and businesses, including Kleinunternehmer (small businesses with an annual revenue subject to VAT of under 22,000 EUR).
What other options do I have?
Social welfare, otherwise known as Arbeitslosengeld II, ALG II or Hartz IV, is available to cover your living expenses. If you have a tax advisor and significant fixed operating costs, it might be worth looking into applying for Überbrückungshilfe II, which is still possible until 31.12.2020, to cover these costs for the period Sep-Dec 2020. Überbrückungshilfe III might also be a light at the end of the tunnel for those who are currently not eligible. This remains to be seen!
What should I do next?
Check your revenue from 2019 and figure out whether it’s better to use the average weekly turnover for the whole of 2019 or November 2019’s weekly turnover specifically. Then, sit tight and wait for the details.
Red Tape Translation intends to offer reduced price online help for anyone wishing to apply for November-Hilfe. First, we’ll take a look at the application form to see how complex it is and whether a time-limited queue system will be put in place to avoid crashing the website, as it was for Soforthilfe II. Once we know those details, we’ll find a good solution to help you apply! Check back to find out more in the coming weeks.