Emergency Child Supplement: KiZ Without a Means Test
The child supplement (KiZ) amounts to a maximum of 185 euros per month per child for whom child benefit is received. Low-income families have already been eligible for the child supplement—but now the application requirements have been relaxed. To ensure that families who are facing short-term loss of income due to the COVID-19 pandemic can also benefit from the child supplement, the so-called emergency KiZ is now available: Starting in April 2020, families applying for the KiZ no longer need to provide proof of income for the past six months, but only for the month immediately preceding the application. Benefits are provided for a period of six months without consideration of assets. This provision is valid through September 30, 2020.
Parents with a gross income of at least 900 euros and single parents with a gross income of at least 600 euros receive a supplement of up to 185 euros per month. Prerequisite: The children living in the household must be unmarried, under 25 years of age, and already receiving child benefit.
As of January 2020, the previous upper income limits have been abolished, meaning that the KiZ is no longer completely eliminated for higher incomes but is gradually reduced until it is phased out entirely. In addition, only 45 percent—instead of the previous 50 percent—of the parents’ income exceeding their own needs is now counted toward the KiZ.
Check Your Eligibility
Couples or single parents can use the Family Benefits Office’s KiZ Guide to determine whether applying for the child supplement is worthwhile. The application for the emergency KiZ can be submitted online. Information sheets and forms are available here: arbeitsagentur.de/notfall-kiz
Income Replacement Due to School and Daycare Closures
Anyone who has to stay home to care for their children because daycare centers, schools, and after-school care facilities are still closed may receive financial compensation under the Infection Protection Act.
This compensation is paid for a maximum of six weeks and amounts to 67 percent of monthly net income, up to a maximum of 2,016 euros. The right to compensation applies only if the child requiring care is younger than twelve years of age—that is, has not yet reached their twelfth birthday. If there are multiple children, the age of the youngest child applies.
A prerequisite for receiving compensation is that the parent providing care has exhausted their flex-time and overtime credits, as well as any options provided under their collective bargaining agreement, and has taken their vacation from the previous year as well as any vacation that has already been approved. Parents who are currently working from home and can care for their children there are not entitled to compensation. The same applies to parents on short-time work, at least to the extent that they have reduced their working hours.
The employer is responsible for making the payment. The employer can then seek reimbursement from the relevant state authority. Self-employed individuals are also eligible for the compensation. They apply for the benefit directly with the authority. The regulation has been in effect since March 30 and is set to remain in force until December 31, 2020.
Housing Assistance for Renters
Working households in financial distress who are not eligible for supplementary unemployment benefit II (Arbeitslosengeld II) can apply for housing assistance.
Employed individuals who, despite a low income, do not fall below the subsistence level have a legal right to housing assistance and should definitely make use of it. Tenants receive a subsidy toward their monthly gross rent excluding utilities. A utility subsidy is available for homeowners and condominium owners.
The basis for calculating housing assistance is the so-called gross rent excluding utilities. This is calculated as the net rent excluding utilities plus the utility costs, such as water, street cleaning, garbage collection, building liability insurance, and property tax.
Whether you are eligible and the amount you receive depend on your household’s total income and its size. When determining income, child benefit and the child supplement are not counted as income.
People with a severe disability receive an income exemption. In 2020, this exemption amounts to 1,800 euros. To qualify, the applicant must have a disability rating of 100 percent or a disability rating of less than 100 percent if they require long-term care and are receiving home care or semi-residential care.
Housing Allowance Calculator
Rent—or, in the case of owner-occupied homes and condominiums, the mortgage payment—is eligible for assistance only up to certain maximum amounts. As of January 1, 2020, there are now seven rent tiers instead of six. The maximum amounts are based on local rent levels.
Detailed information is provided in the brochure “Housing Allowance 2020” from the Federal Ministry of the Interior, Building, and Community (BMI), which can be downloaded as a PDF from its website.
Tables providing guidance on housing allowance amounts for up to six eligible household members, a list of municipal rent tiers effective January 1, 2020, and a housing allowance calculator are available from the BMI: bmi.bund.de/wohngeld
Application forms for housing allowance are available from the local housing allowance office at the municipal, city, district, or county administration.
Employer-Sponsored Pension Plans: Reduce or Defer Contributions
Those currently on short-time work are also wondering how they’ll still be able to afford retirement savings. The MetallRente pension fund can help.
When short-time work is introduced, deferred compensation for occupational retirement plans is technically possible, but in most cases it is not desired—or at least not to the same extent as before. MetallRente, the joint pension fund of Gesamtmetall and IG Metall, therefore offers not only a temporary reduction in contributions but also a deferral—that is, a complete suspension of contribution payments. Early termination of the plan due to short-time work is therefore not necessary.
During short-time work, contributions can be reduced or deferred (suspended) for up to six months. This option is available through MetallDirektversicherung, MetallPensionskasse, and MetallPensionsfonds, provided the contract has been in effect for at least three months. Employees can informally arrange this with their employer or use a sample letter provided by MetallRente. Anyone wishing to have their pension contributions reduced or deferred must submit the request to MetallRente by June 30, 2020, at the latest. The good news: Insurance coverage remains in effect even with reduced or deferred contributions during short-time work.
After the short-time work period, employees can decide for themselves whether or not they want to make up the reduced or deferred contributions.
For those who do not make up the difference, their pension benefits will be reduced by an amount corresponding to the contributions that were reduced or deferred during short-time work.
Those who wish to make up for the shortfall will pay a higher contribution for a limited time after the short-time work period to offset the reduction or deferral. This requires a supplementary agreement to the existing deferred compensation arrangement.
Contact MetallRente
Employees should contact their HR department and speak with a MetallRente advisor. Only they are authorized to provide advice and contract-related information. Information is available via email or by calling the toll-free number: 0800 723 50 91.
Detailed information on short-time work and retirement planning can be found here: metallrente.de
Payment Deferrals for Consumer Loan Agreements and Contracts for Energy, Water, and Communications
Anyone who now has less money available due to the coronavirus pandemic will need to rework their budget. While the federal government has put together an aid package for consumers, the bottom line is that it mostly involves deferring expenses until later.
The law is intended to provide relief to people who are unable to meet certain payment obligations due to the current COVID-19 pandemic. It also covers loans and mandatory insurance. Examples of expensive mandatory insurance policies include private health and long-term care insurance, as well as auto liability insurance. The law also applies to real estate loans. Under the new regulation, consumers have the option to defer payments for three months.
This applies to loan agreements entered into before March 15, 2020, as well as insurance policies taken out before March 8, 2020.
Those affected must demonstrate that their income has decreased due to the coronavirus crisis and that they are therefore no longer able to pay. Furthermore, the payment obligations remain in effect—those who cannot pay now must make up the payments later.
No one should be cut off from essential services due to the coronavirus pandemic. These include electricity, gas, water, and telephone and internet service. The law applies to all contracts entered into before March 8, 2020. Those affected now have the right to temporarily suspend payments by invoking a “temporary right to withhold payment.”
Request a Payment Deferral
Using the free sample letters, those affected can inform their credit and insurance companies, as well as their energy and telephone providers, of their financial hardship.
verbraucherzentrale.nrw/corona
Rent Arrears During the Coronavirus Crisis
From April 1 through June 30, 2020, restrictions apply to landlords who wish to terminate a tenant’s lease due to rent arrears. Rent arrears for April, May, and June do not justify termination if the rent could not actually be paid due to the effects of the COVID-19 pandemic. This temporary prohibition on termination applies to the net rent (excluding utilities) and ongoing operating costs. The regulation applies only to terminations due to rent arrears from April through June 2020. Rent arrears incurred during this period, including 4% late-payment interest, must be repaid by June 30, 2022, at the latest. If this does not occur, the landlord may terminate the lease.
Those affected should notify their landlord as soon as possible that, due to the COVID-19 crisis, they are temporarily unable to pay rent or can only pay a portion of it. They must also provide the landlord with supporting documentation, such as official notices or letters from their employer regarding the loss of income.
