Insurance and contribution law implications of reclaiming short-time allowance from 2023 onwards

Contrary to their previous view, the leading social insurance associations (“Spitzenverbände”) have agreed that, from 2023 onwards, reclaims of short-time allowance (“Kurzarbeitergeld”) after previous provisional approval will no longer be left uncorrected in the contribution statement.

Background

To ensure rapid processing and payment of the short-time allowance applied for, the short-time allowance was initially paid as part of a provisional decision. After the end of the short-time allowance period, the settled reference periods are finally audited (final audit) and the employer is notified of the final decision in writing.

With regard to the assessment of reclaims under insurance and contribution law, the central organizations have so far taken the view that no corrections are necessary in the event of a reclaim of short-time allowance after a previous provisional approval. In line with the concept of protection of legitimate expectations, it should not be possible to retroactively eliminate an insurance obligation once it has existed - especially if the final review of short-time allowance receipt does not take place promptly after receipt has ended.

New regulations from 2023

Following a new assessment of the factual and legal situation, in which the German Federal Ministry of Labor and Social Affairs was also involved, the leading organizations have changed their opinion in this regard.

Accordingly, as of 2023, corrections under contribution law must be made if, after the final audit by the Employment Agency, it is determined that the conditions for granting short-time allowance for payroll accounting periods from January 2023 were not met. Consequently, in addition to the repayment of short-time allowance benefits, the necessary contributions must also be corrected.

Employers may - as in other circumstances - assert a claim against the employee for the portion of the total social security contribution to be borne by the employee, but this is only possible by deduction from remuneration. Since such a deduction may only be made within the three payrolls following the correction period, the employer in fact must bear both the employer's and the employee's share.

Practical advice

If the Agency for Employment's final audit in your company has determined that the requirements for the granting of short-time allowance for payroll accounting periods from January 2023 were not met, you now have several obligations.

First, you may have to repay any short-time allowance that was paid incorrectly. In addition, the social security contributions paid on it must also be corrected. We will be happy to work with you to find a solution that is right for your company. We will also be happy to answer any further questions you may have in this context.

From Nina Loncar and Daniel Concellón