A sign on the window of a restaurant in Berlin. The catering industry has been especially hard-hit by the pandemic/Photo: AfricanCourierMedia

Germany: Governing coalition agrees on further corona aid for families and businesses

Germany’s governing grand coalition has agreed on further aid to families and businesses because of the corona pandemic. The decision was made by the coalition committee of CDU/CSU and SPD on Wednesday (3 February), after a meeting in the office of the chancellor in Berlin.

The meeting, at which the new CDU leader Armin Laschet also took part for the first time, was the first top-level meeting of its kind since last August.

The coalition partners agreed to cushion the negative consequences of the coronavirus pandemic with financial aid to low-income earners and tax relief for companies.

Families are to receive a special child bonus, as they did last year. The supplement to the child benefit is to be a one-time payment of 150 euros. Last year, families were given 300 euros per child to boost consumption.

Adult basic income support (Hartz IV) recipients are also to receive a one-time extra allowance of 150 euros.

For self-employed persons and employees with low income who suddenly find themselves in need, easier access to basic income support will be extended until the end of 2021. Asset checks (Vermögensprüfung) of the applicants will thus only be carried out to a limited extent and applications for benefits will be provisionally approved more easily.

The CDU/CSU and SPD also want to help the catering industry, which has been hit particularly hard by the lockdown.

A reduced VAT rate of seven per cent is to continue to apply to food in restaurants and cafés until the end of 2022. Originally, the regulation had been limited until the end of June.

The grand coalition is also giving companies with corona-related losses more help. By means of an extended ‘loss carryback’, they will be able to offset these losses in their tax returns against profits from previous years to a greater extent than before.

The proposals will now be submitted to the federal cabinet which is expected to adopt them.

Femi Awoniyi

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