COVID-19 financial support (various instruments)

Austria
Phase: Management
Typ:
  • Access to finance
  • Response to COVID-19
  • Support of SMEs
Senast ändrad: 03 August, 2021
Lokalt namn:

COVID-19 Überbrückungsfinanzierung (verschiedene Instrumente)

Engelskt namn:

COVID-19 financial support (various instruments)

Coverage/Eligibility

aws Überbrückungsfinanzierung/-garantie für EPU/KMU (bridging finance/guarantee for one-person enterprises and SMEs) is eligible for SMEs for all sectors of the economy, with a special package for tourism.

'Härtefall-Fonds' (hardship fund) covers self-employed and micro enterprises (according to EU definition) who have a drop in sales of at least 50% compared to the same month of the previous year due to COVID-19. Self-employed who earned more then €33,812 net in the last year for which tax assessment is available are not eligible. The company has to provide evidence that the company was not in difficulty as defined by EU Directive 651/2014 before the COVID-19 crisis. Applications are possible until 31 January 2021, for income losses realised until 15 December 2020.

'Corona-Hilfs-Fonds' offers subsidies for fixed costs of enterprises (Fixkostenzuschuss) arising up to 15 September 2020. A second phase, to cover fixed costs arising until 15 March 2021 is planned, but as of October 2020 pending approval by the European Commission. The financial sector and companies with at least 75% public ownership are not eligible. To be eligible, companies have to have realised a sales loss of at least 40% compared to the same period in the previous year due to COVID-19 (for costs arising between 16 March and 15 September 2020), or 30% respectively (for 15 September 2020 to 15 March 2021). The company has to provide evidence that the company was not in difficulty as defined by EU Directive 651/2014 before the COVID-19 crisis. Furthermore, applicants have to show that they take all reasonable measures to achieve sales and maintain jobs in Austria. They must not pay bonuses to CEOs or top management of more than 50% of the bonuses in the previous year, and cannot have dismissed more than 3% of the staff in the subsidy period if they had employed more than 250 full-time equivalents at 31 December 2019.

Main characteristics

Since March 2020, the Austrian government, in consultation with the social partners, is providing specific support to companies suffering from the COVID-19 crisis. The period of application has been extended to the mid of December 2020.

Bridging financing for one-person enterprises and SMEs

One of these instruments is the 'aws Überbrückungsfinanzierung/-garantie für EPU/KMU'. Companies can request the support through their banks. There are three variants:

  • Loans up to €500,000 are supported with a guarantee of 100%.
  • Loans up to €27,700,000 are supported with a guarantee of 90%.
  • If the company complies with the EU definition of an ‘undertaking in difficulty’, the quarantee only supports 80% of a loan with a maximum of €1,500,000.

Bridging finance for tourism

As the tourism industry is exceptionally affected, a special package is available. The ministry takes liability for credits with a total volume of €100 million in order to bridge financing for tourism businesses. The costs of providing these liabilities are covered by the ministry of tourism. Next to tourism, an additional volume of €10 million in liabilities is provided for SMEs.

Hardship fund

For self-employed, the 'Härtefall-Fonds' provides a lump sum payment which does not have to be paid back. It is intended to cover the cost of living of self-employed suffering from income loss due to COVID-19.

In a first phase (applications until 17 April 2020), self-employed received €500 if their annual net income was below € 6,000 and € 1,000 if it was above. The grant can be topped up by a ‘come back bonus’ of €500. In a second phase (applications from 20 April onwards), beneficiaries can receive up to €2,000 per month for up to 6 months, plus the 'come back bonus' of € 500 per month. While the subsidy in Phase 1 was a lump sum, in Phase 2 it is 80% of the realised income loss, or 90% of the income loss if the average monthly income is €966.65. In any case, a minimum of €500 is paid.

Fixed cost support

This support aims to cover fixed costs that continue to accumulate and are difficult to be covered in a situation of sales loss due to COVID-19. Fixed costs in this context can include costs for rental and lease of business premises, corporate insurance fees, interest payments for credits and loans, finance cost components of leasing payments, corporate license payments, costs for electricity, gas or telecommunication, loss of perishable goods if they lost at least 50% of their value during COVID-19, staff costs arising from dealing with cancellations and rebookings caused by COVID-19, remuneration of the entrepreneur (with a minimum of €666.67 and a maximum of €2,666.67 per month), and fees for tax consultants, auditors or accountants of up to €500.

In Phase 1, the subsidy can be applied for up to 3 months between 16 March and 15 September 2020, in Phase 2 for up to 6 months between 16 September 2020 and 15 March 2021.

In Phase 1, the level of support refers to 

  • 25% cost compensation if salesloss is 40-60%, with a total maximum compensation of €30 million per company/holding;
  • 50% cost compensation if salesloss is more than 60% and up to 80%, with a total maximum compensation of €60 million per company/holding;
  • 75% cost compensation if salesloss is more than 80%, with a total maximum compensation of €90 million per company/holding.

In Phase 2, the cost compensation corresponds to the share of sales loss. The maximum subsidy is €5 million.

Funding

  • National funds

Involved actors

National government
Funding
Employer or employee organisations
Have been consulted; the hardship fund is administered by WKO (and AMA for agriculture)
Övriga
Überbrückungsfinanzierung/-garantie für EPU/KMU administered by aws; for the administration of the hardship fund, the tax authority provides relevant data to WKO; Fixkostenzuschuss is administered by the newly established public agency COFAG, application is done through the online system of the tax authority

Effectiveness

Hardship fund

For 2020, the available budget amounts to €2 billion, an additional €200 million are budgeted for 2021. As of 30 September 2020, subsidies in the amount of €121.9 million for Phase 1 and €463 million for Phase 2 have been paid by WKO. AMA paid €2.3 million for Phase 1 and €7.9 million for Phase 2.

144,000 applications for Phase 1 and 496,000 applications for Phase 2 have been made to WKO as of 30 September 2020. 92% of the applications for Phase 1 and 80% of those for Phase 2 have been approved. AMA received 2,900 applications for Phase 1 and 8,800 for Phase 2. 

Fixed cost subsidy

For 2020, the available budget amounts to €8 billion, an additional €4 billion are budgeted for 2021. As of 30 September 2020, subsidies in the amount of €250 million have been approved and € 172.8 million have been paid. Most of the realised grants are below €10,000 (average subsidy €9,500).

By the end of September 2020, 44,000 applications have been received, mainly from small companies. About 26,300 have been approved; rejections amount to only about 1,500, the rest are withdrawals. About 1/3 of applications refer to hotels and restaurants, about 25-30% to wholesale, retail and repair of motor vehicles and about 25% to other serices sectors.

Strengths

Hardship fund

  • Important instrument for self-employed and one-person enterprises to ensure coverage of costs of living in the crisis situation.
  • Generous support.
  • Quick and unbureaucratic support.
  • Automated cutting point between the administering body and the tax authority.

Fixed cost subsidy

  • Efficient administrative process, quick provision of financial support.
  • Coverage of all company sizes, as a complementary instrument to other support.
  • Important signal of the government to support businesses to keep afloat, to avoid unemployment in the crisis situation.

Weaknesses

Hardship fund

  • Employee organisations have not been involved in the design of the measure.
  • Complex calculation method in Phase 2.
  • Quick establishment resulted in the need to revise the support several times.
  • Lacking preparation time in the administering body resulted in the beginning in challenges in the implementation.

Fixed cost subsidy

  • Employee organisations have not been involved in the design of the measure.
  • Obligation to involve a tax consultant is a burden for smaller companies.
  • A less generous support with fewer checks might be better suitable for smaller companies.
  • Contradiction between making the underlying directive short and concise and making it operational for the heterogeneity of the economic structure.
  • Negotiations with the European Commission delay the implementation of Phase 2.

Exempel

No information available.
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