THERE WILL BE A SHIELD 3.0 30 April 2020
The government has adopted a draft of another regulation (the so-called Anti-Crisis Shield 3.0) aimed at mitigating the effects of the crisis caused by the coronavirus pandemic. Among the key provisions was the extension of the possibility to apply for an exemption of Social Security contributions to a group of entrepreneurs who employ up to 49 employees and whose monthly income did not exceed PLN 7,000. The exemption can only apply to April and May. The controversial provisions on the possibility of dismissing employees or sending them on compulsory leave have been dropped from the bill.
As we await the details of the new solutions - which, as the experience with „Shields 1.0 and 2.0” shows, are likely to undergo significant modifications in the course of the work, we recall the most important assumptions of the existing laws.
COVID- 19 Act benefits (so-called crisis shield)
A) Employer support:
Job protection benefits and payments to subsidise workers' salaries.
- Paid out if the entrepreneur's business turnover has fallen by min. 15% (compared to the same period last year) or by min. 25 % (compared to turnover in the month preceding the month of application);
- Paid during periods of standstill or reduced working hours;
- it is necessary to conclude an agreement with the trade unions/employee representatives;
- benefits do not accrue if the employee receives sick pay or sick pay allowance during reduced working hours;
- an application for their award shall be submitted to the marshal of the province with jurisdiction over the entrepreneur's registered office;
- funds are available for 3 months from the date of application and are tax-free;
- granted by means of an agreement between the entrepreneur and the Marshall of the province;
- the entrepreneur shall submit to the marshal a schedule of monthly benefit payments and their amounts ;
- for the period of receipt of funds + 3 months, the employee cannot be dismissed;
B) Support for the self-employed and those working under civil law contracts:
Parking benefit
- the benefit is non-taxable and non-contributory
- parking allowance is available:
1.Person running a non-agricultural business activity (entrepreneur)
- income in the month preceding the application (March) was 15% lower than in the previous month (February);
- the aforementioned income was no more than 300 % of the average salary (i.e. PLN 15,595.74);
- of 80% minimum salary in 2020. - PLN 2080;
2. a person working under a civil law contract
- the contract was concluded before 01.02.2020
- the income from the contract in the month preceding the application was not more than 300% of the average monthly salary;
- in the amount of 80% of the minimum salary in 2020. - PLN 2080 or the sum of salaries obtained from civil law contracts if the sum of income in the month preceding the submission of the application (March) was less than 50% of the minimum salary in 2020.
General conditions:
- the applicant is not subject to social insurance on any other basis;
- there has been downtime in the conduct of the entrepreneur's or principal's business;
- The application is submitted to ZUS (the contractor submits it through the principal);
- form of the application: paper/electronic document bearing a qualified electronic signature, a trusted signature or a personal signature, using the information profile created in the ICT system made available by the Social Insurance Institution;
- the granting/denying of the benefit is done by decision (as soon as it is clear whether or not it is due) - an appeal to court within one month of the service of the decision (Article 4779 § 1 of the Code of Civil Procedure);
- submission deadline - up to 3 months after the month in which the abolished epidemic state;
- may be granted up to three (3) times - provided that the applicant's situation has not improved.
Subsidising part of the costs of running a business for an entrepreneur - a natural person with no employees.
- granted on the basis of a contract with a starost, for max. 3 months,
- paid on a monthly basis, after the entrepreneur has submitted a declaration of activity in the month for which the remuneration is paid;
- the entrepreneur is obliged to be in business for the period for which the grant is awarded + in the corresponding period;
- The application is submitted to the district employment office with jurisdiction over the place of business;
- deadline - 14 days from the announcement of the vacancy by the director of the district employment office;
- is available to entrepreneurs in the event of a decline in turnover;
C) One-off loan to cover ongoing operating costs for micro-entrepreneurs
- awarded on the basis of an agreement with the district governor;
- The application is submitted to the district employment office with jurisdiction over the place of business;
- deadline for application - 14 days from the announcement of the recruitment by the director of the district employment office;
- repayment term - 12 months (can be extended);
- shall be waived with interest upon request if the micro-entrepreneur continues to operate for 3 months from the date the loan was granted.
Exemption from the obligation to pay social security contributions
Conduct:
1) To a payer who reported max. 49 insured persons and was declared as a premium payer before 01.02.2020
- The exemption covers unpaid contributions to social security, health insurance and the Labour, Solidarity, Guaranteed Employee Benefits, Bridging Pensions Funds indicated in the settlement declarations for the period from 1.03.2019 to 31.05.2020;
2) Entrepreneurs paying their own contributions
- the exemption shall cover unpaid social or health insurance contributions
- conditions:
- was active before 01.02.2020
- income in the first month covered by the application was not more than PLN 15,595.74
Release mode:
- upon application to ZUS by 30 June 2020;
- form of application: paper/electronic document bearing a qualified electronic signature, a trusted signature or a personal signature, using the information profile created in the ICT system made available by the Social Insurance Institution;
- ZUS informs the payer of the exemption;
- a decision to refuse exemption may be appealed to the President of the Social Insurance Institution for reconsideration;
- exempt contributions are equivalent to paid contributions;
- income in the form of exemption from contributions is not taxable.
The government has adopted a draft of another regulation (the so-called Anti-Crisis Shield 3.0) aimed at mitigating the effects of the crisis caused by the coronavirus pandemic. Among the key provisions was the extension of the possibility to apply for an exemption of Social Security contributions to a group of entrepreneurs who employ up to 49 employees and whose monthly income did not exceed PLN 7,000. The exemption can only apply to April and May. The controversial provisions on the possibility of dismissing employees or sending them on compulsory leave have been dropped from the bill.
As we await the details of the new solutions - which, as the experience with „Shields 1.0 and 2.0” shows, are likely to undergo significant modifications in the course of the work, we recall the most important assumptions of the existing laws.
COVID- 19 Act benefits (so-called crisis shield)
A) Employer support:
Job protection benefits and payments to subsidise workers' salaries.
- Paid out if the entrepreneur's business turnover has fallen by min. 15% (compared to the same period last year) or by min. 25 % (compared to turnover in the month preceding the month of application);
- Paid during periods of standstill or reduced working hours;
- it is necessary to conclude an agreement with the trade unions/employee representatives;
- benefits do not accrue if the employee receives sick pay or sick pay allowance during reduced working hours;
- an application for their award shall be submitted to the marshal of the province with jurisdiction over the entrepreneur's registered office;
- funds are available for 3 months from the date of application and are tax-free;
- granted by means of an agreement between the entrepreneur and the Marshall of the province;
- the entrepreneur shall submit to the marshal a schedule of monthly benefit payments and their amounts ;
- for the period of receipt of funds + 3 months, the employee cannot be dismissed;
B) Support for the self-employed and those working under civil law contracts:
Parking benefit
- the benefit is non-taxable and non-contributory
- parking allowance is available:
1.Person running a non-agricultural business activity (entrepreneur)
- income in the month preceding the application (March) was 15% lower than in the previous month (February);
- the aforementioned income was no more than 300 % of the average salary (i.e. PLN 15,595.74);
- of 80% minimum salary in 2020. - PLN 2080;
2. a person working under a civil law contract
- the contract was concluded before 01.02.2020
- the income from the contract in the month preceding the application was not more than 300% of the average monthly salary;
- in the amount of 80% of the minimum salary in 2020. - PLN 2080 or the sum of salaries obtained from civil law contracts if the sum of income in the month preceding the submission of the application (March) was less than 50% of the minimum salary in 2020.
General conditions:
- the applicant is not subject to social insurance on any other basis;
- there has been downtime in the conduct of the entrepreneur's or principal's business;
- The application is submitted to ZUS (the contractor submits it through the principal);
- form of the application: paper/electronic document bearing a qualified electronic signature, a trusted signature or a personal signature, using the information profile created in the ICT system made available by the Social Insurance Institution;
- the granting/denying of the benefit is done by decision (as soon as it is clear whether or not it is due) - an appeal to court within one month of the service of the decision (Article 4779 § 1 of the Code of Civil Procedure);
- submission deadline - up to 3 months after the month in which the abolished epidemic state;
- may be granted up to three (3) times - provided that the applicant's situation has not improved.
Subsidising part of the costs of running a business for an entrepreneur - a natural person with no employees.
- granted on the basis of a contract with a starost, for max. 3 months,
- paid on a monthly basis, after the entrepreneur has submitted a declaration of activity in the month for which the remuneration is paid;
- the entrepreneur is obliged to be in business for the period for which the grant is awarded + in the corresponding period;
- The application is submitted to the district employment office with jurisdiction over the place of business;
- deadline - 14 days from the announcement of the vacancy by the director of the district employment office;
- is available to entrepreneurs in the event of a decline in turnover;
C) One-off loan to cover ongoing operating costs for micro-entrepreneurs
- awarded on the basis of an agreement with the district governor;
- The application is submitted to the district employment office with jurisdiction over the place of business;
- deadline for application - 14 days from the announcement of the recruitment by the director of the district employment office;
- repayment term - 12 months (can be extended);
- shall be waived with interest upon request if the micro-entrepreneur continues to operate for 3 months from the date the loan was granted.
Exemption from the obligation to pay social security contributions
Conduct:
1) To a payer who reported max. 49 insured persons and was declared as a premium payer before 01.02.2020
- The exemption covers unpaid contributions to social security, health insurance and the Labour, Solidarity, Guaranteed Employee Benefits, Bridging Pensions Funds indicated in the settlement declarations for the period from 1.03.2019 to 31.05.2020;
2) Entrepreneurs paying their own contributions
- the exemption shall cover unpaid social or health insurance contributions
- conditions:
- was active before 01.02.2020
- income in the first month covered by the application was not more than PLN 15,595.74
Release mode:
- upon application to ZUS by 30 June 2020;
- form of application: paper/electronic document bearing a qualified electronic signature, a trusted signature or a personal signature, using the information profile created in the ICT system made available by the Social Insurance Institution;
- ZUS informs the payer of the exemption;
- a decision to refuse exemption may be appealed to the President of the Social Insurance Institution for reconsideration;
- exempt contributions are equivalent to paid contributions;
- income in the form of exemption from contributions is not taxable.