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Bulgaria
Phase: Management
Tyyppi:
  • Response to COVID-19
  • Income support for workers
  • Working time flexibility
Viimeksi muutettu: 05 November, 2020
Alkuperäinen nimi:

КОВИД - 19 мярка: Подпомагане на работещите в реалния сектор (мярката 60/40)

Englanninkielinen nimi:

COVID-19: Income support for workers (measure 60/40)

Coverage/Eligibility

The programme covers companies whose activities have been prohibited by restrictive measures related to COVID-19 and companies whose turnover decreased by 20% compared to the same period in 2019.

The list of industries that are not included in the first wave of the programme (13 March - 30 June 2020) include: agriculture, financial and insurance activities, government, education, human health and social work, households as employers, activities of extraterritorial organisations and services.

During the second wave of the programme (1 July - 30 September 2020), the measure focuses on hospitality industry, in particular seasonal workers. In comparison to the first wave, all workers in healthcare who do not have a contract with the National Health Insurance Fund may apply for compensations, including dentists. Nurseries, kindergartens and training centres may apply as well.

The third wave of 60/40 measure covers all sectors, excluding agriculture, forestry and fisheries, financial and insurance activities, general government, education, (except economic activities with code 85.10 - private sector, and code 85.5), human health and social work activities (except economic activities with code 86.23, code 86.90 and code 88.91 - private sector), activities of households as employers and activities of extraterritorial organisations and bodies.

Main characteristics

Since March 2020 the government covers 60% of the wages as well as the social security contributions of employees in sectors affected by the COVID-19 crisis who would otherwise have been dismissed.  The government agency responsible for the approval of applications is the Employment Agency through its regional and local labour offices. The payment is done by the National Social Security Institute.

After 30 June 2020, employers can apply for subsidised employment when they hire new employees from the national unemployed register as well.  

The entire measure was first extended until 30 September 2020, and with a Council of Ministers' Decree dated 12 October 2020, it was extended by further 3 months until 31 December 2020.

Requirements for applicants:

Employers cannot dismiss employees for whom they receive subsidy while receiving the support; after the end of subsidy, the employer should keep the same employment level for a period equal to the welfare period from which they benefitted.

There will be no requirement for the employers to have paid taxes and social and health insurance contributions for the current year, but they should be declared. Taxes due by the end of 2019 should have been paid.

For the hospitality industry compensations will be paid for employees hired after 1 June 2020 based on contributory income for the respective job.

In addition to the 60/40 measure, starting on 1 July 2020 there are two additional schemes under the 'Human Resources Development Programme' where employers in tourism and passenger transport will be able to apply for both 60/40 and additional compensation of BGN 290 (€148). Since 1 July 2020, employers are also able to apply for the measure 'Employment for you' providing subsidies for hiring unemployed people for a period of 3 months whose wages (minimum wage) and social and health insurance contributions will be paid by the state. The latter will not be eligible for the 60/40 measure.

Funding

  • National funds
  • European funds

Involved actors

National government
Legal framework, funding
Public employment services
Receive and check the applications and send those that have been approved to the National Social Security Institute for payment.
Employer or employee organisations
Social partners were involved in the design of the measure, and the government constantly consults them in the implementation.

Effectiveness

The total cost is estimated at BGN 1.5 billion (€770 million). For the period 13 March-29 June 2020 there were applications from nearly 18,000 employers accounting for almost 290,000 employees. During the entire period of the first wave of support about BGN 185.9 million (€95.8 million) were paid to 8,976 employers for a total of 171,655 employees.

During the second wave, by 29 September, nearly BGN 135 million (€ 69.05 million) were paid to 3,115 employers and 105,227 employees.

Strengths

This measure, along with the other measures implemented by the government, helped retain more than 275,000 jobs, even if only temporarily.

Weaknesses

The COVID-19 measure 'income support for workers' was extended two times - the second time as of 12 October - and will continue running till the end of 2020. Some employers argued that they had to halt all their operations and could not profit from the 60/40 measure, since they could not cover their part of the workers' remunerations due to low or absent revenue. 

Esimerkit

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