Coronavirus: Federal Council adopts COVID-19 Hardship Assistance Ordinance
Bern, 25.11.2020 - During its meeting on 25 November 2020, the Federal Council adopted the ordinance governing the details of the hardship support programme of the Confederation and cantons. The draft was adjusted based on the results of the general consultation and the consultation of the Economic Affairs and Taxation Committees. Specifically, the ordinance regulates how federal funds are distributed among the cantons and the conditions under which companies are entitled to hardship assistance.
The Federal Department of Finance (FDF) conducted a consultation on the COVID-19 Hardship Assistance Ordinance from 4 to 13 November 2020. Despite the short consultation period, more than 100 responses were received. The procedural concept was supported by all parties, as well as by the vast majority of the cantons and umbrella organisations. The rapid entry into force on 1 December 2020 was also welcomed. At the same time, almost all participants requested changes.
The Federal Council has made the following changes to the draft based on the feedback received:
- Implementation simplifications: Some prerequisites for assistance have been deleted or adapted. In particular, the requirement for any COVID-19 credit with a joint and several guarantee to be fully utilised has been dropped. In addition, the cantons will now be able to simultaneously grant both loans and non-repayable contributions to a company (the draft did not provide for cumulation).
- Decline in turnover: Under the law, a potential case of hardship exists if annual turnover is less than 60% of the multi-year average. The draft ordinance provided that compensation for short-time working and COVID-19 loss of earnings compensation must be added to the 2020 turnover, as many companies were able to offset some of the lost revenue in that way. The Federal Council's ordinance leaves it to the cantons to adjust the definition of turnover.
- Minimum turnover: A company must have generated turnover of at least CHF 100,000 before the coronavirus pandemic in order to apply for hardship contributions. The draft had provided for a minimum of CHF 50,000. The increase is intended to prevent the cantons' scarce administrative resources from being used to process applications from microenterprises.
- State participations: As hitherto, companies that are partly owned by communes or cantons should be able to apply for hardship assistance only if the state participation is less than 10%. However, the ordinance now provides for an exception, in that companies which are more than 10% owned by smaller communes with up to 12,000 inhabitants (e.g. ski lifts or chairlifts owned by mountain communes) are eligible for hardship assistance.
- Ban on dividends/bonuses: The five-year ban on dividends or bonuses in the case of non-repayable contributions is to cease to apply upon repayment of the contribution received.
- Simplified composition proceedings: As an accompanying measure to support companies in distress, it should be possible to simplify composition proceedings.
The recommendations of the Economic Affairs and Taxation Committee (EATC) were taken into account.
The ordinance should enter into force on 1 December 2020. The basis for this ordinance is laid down in Article 12 of the COVID-19 Act, which the Federal Council requested be amended on 18 November 2020. Parliament will deliberate on the corresponding dispatch during the winter session.
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