Coronavirus: How Austrian businesses can receive 80 percent of their revenue in November

Coronavirus: How Austrian businesses can receive 80 percent of their revenue in November
Photo: JOE KLAMAR / AFP
The Austrian economy and in particular the hospitality industry has been hit hard by the coronavirus pandemic. Here’s how the government is planning to support struggling business owners.

From 2pm on Friday, November 6th, business owners in the gastronomy, leisure and hospitality sectors will be able to access funding from the Austrian government. 

The money will be made available to companies affected by the shutdown. 

READ: Everything you need to know about Austria's coronavirus shutdown 

Under the plan, companies will be reimbursed 80 percent of their sales. The amount they are paid will be determined with reference to the sales they made in November 2019. 

Companies making a request will not need to work out the number themselves. Finance Minister Gernot Blümel said the government would make the calculation based on the corresponding amount submitted in taxation documents from last year. 

‘Extremely favourable’

Austrian media has called the plan “extremely favourable” to business owners, not least because many other expenses associated with staff wages will also be paid by government under the AMS offset scheme.

Under the scheme, employers can set their employees wages to zero and have them paid by the government under the short-time working scheme. 

The cost of the scheme is expected to be between 1.5 and two billion euros in November.

Importantly, the money is available not only to businesses who have been forced to close as a result of the measures. 

Other business – i.e. restaurants which now operate only for takeaway – can also access the funding. 

As reported in Der Standard, this represents a generous level of support as sales made with takeaway trade do not need to be deducted from the 80 percent compensation payment – meaning businesses could receive more than 80 percent.  

'Right and important'

The plan has been welcomed by many in the industry. 

Think tank Momentum said there was the possibility that some businesses could bank up to 35 percent of the support funding as a profit. 

“Without deducting short-time work, this is excellent business for many companies,” says Momentum.

The Austrian Hotels Association welcomed the funding, saying the “right and important” decision will “save” many businesses after what haas been a difficult year .

The architects of the plan – Blümel (ÖVP) and Vice Chancellor Werner Kogler (Greens) – acknowledged that there may be the possibility of overpayment under the scheme. 

Currently, the scheme is only in place until the end of November, which mirrors the current end date of Austria’s lockdown restrictions. 

‘Phase Two’ of the plan will depend on if and how lockdown measures are extended – which itself depends on whether infections and hospitalisations continue to rise. 

 

 


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