Covid-19: Conditions for hardship allowance relaxed
On 13 January 2021, the Federal Council relaxed the conditions that a company must meet in order to receive hardship assistance. Among other things, businesses that have been closed by the authorities for a total of at least 40 calendar days since 1 November 2020 are now considered a hardship case without proof of a decline in turnover. In addition, declines in turnover that occurred in 2021 can now also be claimed.
Hardship programmes have been launched in the cantons, for which a total of around CHF 2.5 billion is available, of which the Confederation is contributing a good three quarters (CHF 1.9 billion). In more than half of the cantons, the first hardship payments are already being made in the current month. In February 2021, all but a few cantons will be able to pay out contributions via the hardship programme, according to the federal government. The cantonal programmes would thus be well suited to providing rapid assistance to farms that are particularly hard hit by Covid-19.
Support across the board
In view of the economic losses caused by sanitary measures, the Confederation has once again relaxed the conditions under which a company is entitled to a hardship allowance and adjusted the assessment of the aid. The Amendment to the Regulation allows the cantons to support hardship cases on a broad front. The amendments were drawn up in consultation with the cantons. In this way, the Confederation supports the cantons in the rapid implementation of their programmes. The most important points:
In the event of closure, proof of a decline in turnover is no longer necessary: Those businesses that have been closed by the authorities for at least 40 calendar days since 1 November 2020 (in particular restaurants, bars and discotheques as well as leisure and entertainment businesses) are now automatically considered hardship cases. They no longer have to provide proof of a 40 percent reduction in turnover.
Consideration of revenue declines in 2021: Businesses that suffer a decline in turnover in the months from January 2021 to June 2021 in connection with measures ordered by the authorities to combat the Covid 19 epidemic can now use the turnover of the last 12 months as the assessment basis instead of the annual turnover for 2020. If the winter season turns out to be bad, many tourism businesses in mountain regions are likely to fall under the hardship regulation as well.
Dividend ban shortened: Furthermore, the prohibition on paying dividends or royalties or repaying capital contributions from owners is reduced to three years or until the aid received is repaid.
Administrative Facilitation: Closed companies have to provide less evidence than "normal" hardship cases.
Ceilings for A-fonds-perdu contributions increased: Cantons can now make contributions of up to 20 percent of annual turnover (previously 10%) and up to CHF 750,000 per company (previously: CHF 500,000) for all companies. This is intended to give better consideration to companies with high fixed costs. It also allows to cover a possible extension of the closures beyond the end of February 2021. The cantons can even increase the absolute upper limit of the aid to CHF 1.5 million, provided that the owners contribute at least the same amount of fresh equity or lenders waive their claims.
The Federal Council has decided to use the 750 million "Federal Council reserve" provided for by Parliament in the Covid 19 Act also for the cantonal hardship programmes, thus supplementing the first three tranches of funds. However, he does not want to decide on the distribution among the cantons until later.
In addition, the Federal Council will examine in the sense of contingency planning whether it would make sense to reactivate the Covid solidarity guarantees in the event of a third wave with a sharp deterioration in the economic situation in order to secure liquidity and support the economy, and how such a programme would be designed.
In order to support the recovery after the crisis, the Confederation has a number of instruments at its disposal, such as labour market measures or various programmes to promote innovation.
Source: Confederation
Where can I submit an application for hardship assistance?
The cantons are responsible for the concrete design of hardship assistance. They also examine the applications in individual cases. Questions regarding the processing of an application should accordingly be addressed to the canton in which the company was domiciled on 1 October 2020. You can find the cantonal contact details at covid19.easygov.swiss. The federal ordinance regulates how federal funds are distributed among the cantons and what conditions must be met for the federal government to contribute to the costs of cantonal hardship schemes.
