Lots of freelancers find themselves in a tough financial situation. Ever since the pandemic started, many of us have been left entirely without work. There are financial instruments like Kurzarbeitergeld for employees, but freelancers have often been left with no choice but to get their basic needs covered by the Jobcenter.
by Lioba Grunow
Some of us managed to get IBB’s Soforthilfe II in March 2020 before things got complicated. Others let out a sigh of relief when November- and Dezemberhilfe arrived, giving self-employed people easy access to financial support of up to 75% of their average monthly revenue in 2019. Maybe you thought that this model of aid would simply continue for the remainder of the lockdown? I certainly did. It was a simple process, and – I don’t know about you – it definitely made me sleep a little better at night.
Sadly, the government decided not to continue this form of aid in 2021. This means that freelancers affected by the corona measures are once again dependent on ALG II, aka Grundsicherung, social welfare or Hartz IV.
They didn’t forget us entirely. ‘Überbrückungshilfe‘ (engl. bridging aid) came into effect last year. Businesses (with the help of tax advisors) could apply for financial support to cover their ongoing expenses like rent for office space, leasing fees or loans. But most solo self-employed people don’t have these types of expenses. I, for example, am an actress and my only business expenses are my website, headshots, AV equipment, yearly fees for casting websites and the occasional workshop. None of these are classified as “ongoing operational costs”.
And now, the good news.
The new ‘Überbrückungshilfe III‘ is a modified form of aid available in 2021 that could help many of us, however. Although it primarily helps bigger businesses, it includes the ‘Neustarthilfe für Soloselbständige‘ (engl. Fresh start aid for solo self-employed people), specially designed for any freelancers in arts and culture.
To cover the period between December 2020 and June 2021, you can get 50% of your average monthly revenue of 2019 for each of those months. It will be a one-time payment of maximum 7,500€. This is a modified version on which the government agreed just a couple of weeks ago (they had initially claimed it would be just 25% of the revenue and capped it at 5,000€).
The bad news: it is designed to cover business expenses only. But the good news is that the business expenses are not set in stone, as in previous aid programs. This means that an actress CAN use Neustarthilfe for things like headshots, AV equipment, etc. The other good news is that, just like November- and Dezemberhilfe, it can be combined with ALG II and won’t affect any payments you receive from the Jobcenter.
If you have received Dezemberhilfe, you cannot get Neustarthilfe for the month of December 2020, but you can get it for the first six months of 2021.
Another huge improvement is that now, people who are ‘unständig selbstständig‘ also have access to this aid. For example, actors or crew members who work in film or theater productions are often employed for the duration of the production only. The problem is that they are not continuously employed, but have gaps between projects in which they are technically unemployed. Although they might have been employed temporarily by a theatre, economically they are still considered self-employed. Due to this technicality, they have until now been ignored by the government and could not access any of the financial aid programs. Neustarthilfe finally acknowledges their status.
Neustarthilfe is taxable and does not have to be paid back. At the end of the granting period, they will request to see your revenue for the seven month period between December 2020 and June 2021. If your revenue in that time frame ended up exceeding 50% of the revenue in the reference period (your monthly average of 2019) you will have to pay it back in part.
If your revenue between 01.12.2020 and 30.06.2021 ends up being between 50 and 70% of your monthly average in 2019, you will have to pay back ¼ of the Neustarthilfe you received.
If your revenue is 70-80%, you’ll pay back ½ of your Neustarthilfe amount.
If your revenue is 80-90%, you’ll pay back ¾ of your Neustarthilfe amount.
Who is eligible?
All solo self-employed people
- who cannot get any money through Überbrückungshilfe III
- who earned at least 51% of their income in 2019 from self-employment (self-employment is your main occupation)
- whose revenue has decreased by at least 50% in the granting period (Dec 2020 – Jun 2021) compared to the reference period (2019)
People who started freelancing after October 1, 2019, can use the pre-corona months January and February 2020, or the average monthly revenue of the 3rd quarter of 2020 (July-September) as a reference period.
When can I apply?
Government websites keep stating that applications should be possible in January. It’s now February and applications still haven’t opened yet. There is no information on the application process just yet, but it is likely that applicants will need an ELSTER certificate.
Sign up for our newsletter below and we’ll send you an email when the Neustarthilfe application process opens. You can then book a Life Admin session with Red Tape Translation and we’ll take you through the application online.
Hi, thanks for the info… 2 questions… What if the majority of your income in 2019 was from this temporary type employment like for actors/stage crews? How does that play into the 51%?
Also, I worked on short-contracts (max 7 days) for an IT company that organizes medical/scientific conferences? May I still apply?
Thanks for the help – H
Hi there, sorry for the delay in response, but this will help someone else as well. Yes, they sometimes need it translated so they can figure out what it says, officially, so that they can issue you with a German license that gives you the same conditions. You do exchange your license in the end for a German one. But it’s a license with your information on it, so they need to make sure they’ve understood the information on your Canadian license correctly.