Extension of the NOW wage subsidy scheme starting on 1 October 2020: NOW 3.0
The government announced on 28 August 2020 that the Temporary Emergency Bridging Measure for Sustained Employment (NOW) will be extended starting on 1 October 2020. NOW 3.0 has three periods of three months each and ends on 1 July 2021.
The wage subsidy will be reduced from the second period onwards. In the first period - starting 1 October 2020 - businesses with a fall in turnover of at least 20% will be eligible for support. Starting 1 January 2021, companies suffering a loss of turnover of 30% or more will be able to access the NOW wage subsidy scheme.
The percentage that the employer can receive as a contribution towards labour costs will be gradually reduced each period. In the first period, the maximum wage subsidy will be 80%, in the second period 70% and in the third period 60%.
In contrast to the wage subsidy reduction, there is the possibility of gradually reducing the wage bill without this being at the expense of the contribution. This means that no reduction will be applied in the event of redundancy for economic reasons.
The maximum wage to be reimbursed per employee in period 1 and period 2 will be equal to that of NOW 1.0 and 2.0, i.e. a maximum of 2x the daily wage (EUR 9,538 per month). In the third period, this will be reduced to a maximum of 1x the daily wage.
The training obligation, the ban on paying out dividends and bonus payments and the lump-sum surcharge of 40% for employer's costs, such as holiday pay and pension contributions, remain unchanged. As under NOW 1.0 and 2.0, an employer will receive an advance of 80% of the subsidy amount after the application and the remaining 20% when the final subsidy amount has been determined.
We expect that the first application period will start on 16 November 2020 and that an application can be made for the first period retroactively starting on 1 October 2020.
An employer can decide for each period whether to apply or not. An employer can make use of NOW 3.0 even if it has not applied for NOW 1.0 or 2.0.
The exact conditions of NOW 3.0 are currently being worked out in more detail and will be announced no later than 1 October 2020. We will keep you informed.
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