Short-Time Work Allowance 2021
Financial support for short-time working will be extended until June 2021. The extension will be governed by a new temporary statute, which in practice means that the extension will be a new financial support. At the same time, changes are being made to the existing Swedish Act on Support Related to Short-Time Working (Lagen om Korttidsarbete).
When can I apply for the new financial support?
The new statute and amendments to the existing legislation will become effective on 15 February. It is only then that all the preconditions for obtaining the financial support will be in place and we can complete the work on adapting and developing the system to manage the new financial support programme.To take advantage of the new financial support, you will need to make a new application. Keep in mind though that it is not possible to file a new application prior to when the application period opens.
We estimate that we will be able to begin accepting applications for the new financial support some 5-8 weeks after the new statute has been adopted. When we begin accepting applications, it will be possible to apply for the financial support retroactively from 1 December 2020.
Changes to legal terms and conditions
The new statute and amendments to the existing legislation will lead to several modifications to the seven-month grant period. These changes are described below. The new terms are valid from 1 December 2020 to 30 June 2021. Read more about all the governing legal conditions at www.regeringen.se.
Eligible companies and employers
All employers, apart from certain governmental entities, may be issued support. Business owners and employers are eligible which includes limited liability companies, non-profit associations and foundations. Sole proprietaries do not qualify, except for cases where the owner is the sole employee. The grant also includes furlough workers that are immediate family.
Previous waiting period eliminated
The former 24-month waiting period following a grant term has been phased out to allow for new claims to be issued under the new furlough scheme. The new regulations permit employers who previously have received funds to register new claims in 2021.
Unpaid leave (or reduced pay layoffs) levels will continue to be 20%, 40% or 60. During January, February and March, you can also apply for financial support for short-time working up to 80% of the working hours.
From December 2020 to March 2021, the central government continues to cover 75% of the cost of reducing working hours. From April to June 2021, the central government will cover 50% of the cost. The salary cap of SEK 44,000 per month remains.
It is proposed in the draft law that the comparison month will be the same that was the basis for calculating financial support for short-time working provided in 2020, or in the situation where the employer has not received financial support previously, September 2020. If you have filed more than one applications previously, your comparison month is based on the file that has the earliest month of financial support.
When applying for new financial support, under the Regulation you as an entrepreneur must provide documentation that supports that you have serious financial difficulties caused by circumstances beyond your own control, such as the pandemic.
You will need to provide with your application copies of employment contracts/agreements or collective bargaining agreements for the employees who are short-time working.
Calculations based on comparison month and regular working hours
As per previous grant periods, the so-called comparison month is the basis for calculating financial support. In all other cases, September 2020 is the calculation basis. If you have registered more than one application during the new scheme, the comparison month is based on the earliest grant month on file.
Pay increases effective after the comparison month and staff employed after the comparison month are not covered by the new furlough scheme. Salary or wages must be regular and anything that is conditional or discretionary will not be included in the calculation, for example bonuses or tips.
Distributions and bonuses not included
Financial support is not applicable if dividends are paid or distributed two months prior to or six months after the grant period. These regulations also include other types of compensation for example if shares are repurchased, share capital is reduced or reserved for shareholders. The same rules apply to the parent company. Contributions within a company group can however be made during the grant period. Regulations concerning distributions, dividends and contributions are described in more detail in a previous press release.
Compensation for training or development
Furloughed employees can train providing it does not provide a service to or generate revenue for their employer. Employers can claim compensation for training during furlough periods online, retroactively from 1 January. More about kompetensinsatser
Agreements and employment contracts
There are some things that will be different compared with the previous financial support programme and that are therefore useful to consider when signing an agreement.
From 1 December 2020 to 31 March 2021, the central government covers 75% of the cost of reducing working hours. As of the 1st of April, the central government will cover 50% of the cost.
During the 2021 financial support, it is no longer possible to have different levels of reduction in working hours at the individual level during a single agreement period. Working hours can still be scheduled without restriction throughout the agreement period, however no longer can the period encompass several levels of short-time working for the same employee. Nor can an agreement period extend beyond 31 March. This applies irrespective of whether or not the employer has signed a collective bargaining agreement.
Therefore it will not be possible to move hours worked between the two periods (December 2020 – March 2021 and April – June 2021), nor between different agreement periods.
We regularly update the information on the website.