The solutions prepared by the Ministry of Economic Development, Labour and Technology, the Ministry of Finance and Chancellery of the Prime Minister are included in the draft act, submitted to the Sejm by the MPs of Law and Justice.

In the case of 25 business types according to the Polish Classification of Businesses (PKD) representing entrepreneurs from the most threatened industries, we have a variety of new support instruments. On one hand, they will include the use of financial tools that were used this spring, such as ZUS contribution exemptions and idle time benefit. On the other hand, at the request of several employers' and entrepreneurs' associations, we will expend long-term financial resources, funds for restructuring and supporting business activity. We will not leave entrepreneurs on their own

– says Deputy Prime Minister, Minister of Economic Development, Labour and Technology Jarosław Gowin.

The heads of the Ministry of Economic Development, Labour and Technology are in the process of consultations with representatives of the industries which were hit the hardest by the pandemic, including catering, tourism, wedding industry, hotels, event organisers, congresses and trade fairs.

Key elements of the industry shield assistance

The proposed changes are intended to be passed as an amendment to the Act of 2 March 2020 on special measures concerning preventing and combating COVID-19, other infectious diseases and the crisis situations caused by them.

The draft envisages 25 regulations, the most important of which are:

•  ZUS contribution exemption – exemption from the obligation to pay contributions for the period from 1 November 2020 to 30 November 2020;
•  one-time additional idle time benefit – for businesses registered under specified categories in the Polish Classification of Businesses as of 30 September 2020;
•  suspension of market dues in 2021, allowing entrepreneurs to save a total of over 130 million PLN – the draft also envisions a compensation for municipalities for revenue lost due to the abolition of market dues in 2021, paid from the budget of the COVID-19 Relief Fund;
•  extension of funding of an additional idle time benefit for the tourism industry in 2021 by removing the deadline for transferring funds for the payment of the additional idle time benefit from the existing provisions.

Which industries will get help?

The support will be available to companies from the following industries:

•     catering;
•     entertainment (stage, trade fairs, photography, film);
•     health and fitness (gyms, sports, leisure);
•     retail sales (markets, bazaars);

Exemption from ZUS social security contributions

The draft act proposes an exemption from the obligation to pay due social security and health insurance contributions, Labour Fund contributions, Solidarity Fund contributions, Guaranteed Employee Benefits Fund and the Bridge Pension Fund, for the period from 1 November 2020 to 30 November 2020.

Exemption from the obligation to pay the above-mentioned dues requires that the following conditions are met:

•     running a business registered under one of the specified category cores as of 30 September 2020;
•     submitting the business as a contribution payer by 30 June;
•     providing evidence showing that the revenue in November 2020 was at least 40% lower than the revenue in November 2019.

If the entrepreneur has paid the fees before the request has been accepted, they will be refunded.

The proposed changes also authorise the Council of Ministers to extend the period of exemption from unpaid contributions with an ordinance, if the situation requires such measures, if the state budget allows for it.

Additional idle time benefit

The amendment proposes the introduction of a one-time additional idle time benefits for businesses registered under one of the specified category cores as of 30 September 2020. The idle time benefit is paid out in the amount of 80% of the minimum wage in 2020, namely 2080 PLN.

It is provided to businesses which have obtained at least 40% less revenue from their activities in October or November 2020 compared to October or November 2019, respectively.

Like in the case of the idle time benefit introduced in spring this year, the new benefit will amount to 80% of the minimum wage, while tax card users will get 50% of the minimum wage.

Since this time the support is targeted at specific industries, it will be necessary to attach additional documents to the application, namely a statement concerning the main business category according to PKD and a statement on the decrease in revenue.

According to the amendment, the government will be able, by way of a regulation, to grant a possible payment of further benefits for other accounting periods, if the situation requires it and the state budget allows it.

Suspension of the market dues

As part of the aid from the industry shield, the collection of the market dues in 2021 is to be suspended. This dues are collected almost exclusively from small entrepreneurs without commercial infrastructure, who sell in person, with the help of family members or individual employees. For such entities, having to pay even small dues is a noticeable burden, and suspending them would make for a great help.

For some municipalities that have large marketplaces, as well as spa and health resort towns, the dues constitute an important source of revenue. That is why local governments that lose revenue because of this change will be granted compensation from the COVID-19 Relief Fund.

Due to the fact that in some municipalities the revenues from the market dues are not high, the project provides for the reimbursement of the revenues if they exceed 10,000 PLN (as of 2019). The loss of revenue will be fully compensated - in advance for the whole year, by 31 March 2021 from the COVID-19 Relief Fund.

Payment of additional idle time benefit for the tourism industry

The current legal provisions ensure funding for the benefit in 2020. The proposed amendment is intended to ensure its financing also in the following year.

The draft act proposes removing the deadline for the Minister of Economic Development, Labour and Technology to transfer the funds for the payment of additional idle time benefit for the tourism industry and the costs of handling these benefits.

Deadline for submitting benefit applications

Enterprises that did not meet the conditions in the spring, and only now experienced the downturn for the first time, can benefit from wage subsidies, micro-loans and idle time benefits. They have until 30 June 2021 to submit their requests.

The current provisions of the COVID Relief Act of March this year do not directly indicate the deadlines for the requests for support for entrepreneurs. This means that district and voivodeship employment offices have until 31 December 2020 to spend funds from the Labour Fund reserve earmarked for financing measures in 2020.

The final requests for full 3-month subsidies could therefore be submitted in October, with 2-month funding requests in November and 1-month funding requests in December. What is more, the analysis of spending of district labour offices shows that the vast majority of entities entitled to receive support have already benefited from financial aid.

The proposal to extend the aid until 2021 is in line with the decision of the European Commission which extended the possibility to apply the aid measures set out in the Communication “Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak” and the amendment of the Annex to the Communication from the Commission to Member States on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to short-term export-credit insurance" until 30 June 2021.

This option could be used by entities that currently meet the statutory criteria to receive the above-mentioned support. In the fourth quarter it will be about 67,000 entrepreneurs (small, micro and medium enterprises) that have not yet submitted applications and entities that were established in the period from 1 January 2020 to 31 March 2020 and cannot currently benefit from the aid due to the lack of possibility to show decreased revenue. There could be about 70,000 such businesses.

Industry Shield - how many people will it cover, how much will it cost?

Government calculations show that 200,000 companies with more than 370,000 employees will benefit from the new instruments. The cost of support will exceed 1.8 billion PLN.

The exemption from ZUS contributions in November 2020 will amount to 528.42 million PLN. It will cover 173,412 contributors, which will allow them to save a total of almost 530 million PLN in total

The cost of the idle time benefit will amount to 304.56 million PLN and will cover 146,411 payers. This should translate into direct financial support in the total amount of about 305 million PLN.

Entrepreneurs will save a total of over 130 million PLN thanks to the market due exemption in 2021.

The assumption is that the extension of the deadline for submitting applications for support for entrepreneurs should not cause an increase in the funds provided for individual instruments, but only a transfer between the funds (the Labour Fund, the Guaranteed Employee Benefits Fund, the COVID-19 Relief Fund) and a transfer of unused funds in the plan from 2020 to next year.

The proposed changes will have a positive impact on the activity of micro, small and medium-sized enterprises, making an important contribution to facilitating the functioning of SMEs in the sectors most affected by COVID-19. At the same time, this will make it possible for SMEs to do business, thus stimulating their growth. So far, companies from the catering, entertainment, sports and retail sectors have also received government support. Thanks to the anti-crisis shield, companies gained 2.9 billion PLN due to social security contribution exemptions and idle time benefit payments. What is more, thanks to the financial measures run by the PFR, 30,000 companies operating in these sectors received 3.5 billion PLN in total.

Shield for tourism

What is more, it is worth noting that the Act of 17 September 2020 amending the Act on special solutions related to the preventing and combating COVID-19, other infectious diseases and the crisis situations caused by them and some other acts includes the following support solutions for the tourism industry:

Exemption from social security and other contributions due for the period from 1 July 2020 to 31 September 2020 (including hotel owners, travel agents, pilots and tour guides);

Simplification of the idle time benefit rules.

The new regulations also regulated the rules of granting idle time benefits to travel agents, who will acquire the right according to simplified rules.

Establishment of the Tourist Refund Fund;

The Tourist Refund Fund gives tour operators the opportunity to apply for the refund of amounts paid by travellers to tour operators for tourist events which were cancelled as a direct result of the SARS-Co V-2 outbreak.

Establishment of the Tourist Assistance Fund

The establishment of the Tourist Assistance Fund is intended to support tour operators in future in a situation similar to the current crisis caused by the COVID-19 outbreak.

Additional idle time benefit (for land transport and other industries)

Another legislative solution for the tourism industry was also found in the Act of 7 October 2020 amending certain laws to counteract the social and economic impact of COVID-19. This law made it possible to grant additional idle time benefit to travel agents.