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Government Aid in relation to Covid-19 – Malta

The Prime Minister of Malta just addressed a Press Conference in which he announced a new financial aid package for those sectors hit by the Coronavirus outbreak. These measures shall be added to the previous measures announced by the Government.

Watch the video, in which I explain the government aid in relation to Covid-19 in Malta:

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In the past few days we have received many requests from various enterprises regarding economic support measures in relation to covid-19.

In this post, I will break down each measure into different categories and briefly explain what each measure entails, thereby, making it easier for you to understand whether you are eligible for such measures or not.

I am going to go ahead and start with what is probably the most significant measure:

The wage supplement measure

This measure is aimed at ensuring that each employee is provided with, at least, a basic wage. We can split this measure into three different categories:

Category number 1 deals with those employees working in industries which have:

  1. Either been drastically impacted; or
  2. Had to suspend their operations due to the covid-19 outbreak

Such employees are entitled to up to 5 days’ salary per week based on a monthly wage of €800 per month.

Whilst part time employees are entitled to €500 per month.

Self-employed persons are included in this measure, and, therefore, are also eligible for up to 5 days’ salary per week.

The second category deals with those industries which although did not need to suspend operations, were still adversely affected, such as the manufacturing and wholesale sectors.

This section is category is further divided into another two sections: Malta based enterprises and Gozo based enterprises:

  • Employees working in such industries, in Malta, are eligible for 1 days’ salary per week, which is equivalent to €160 per month.
  • Part time employees who also work in such industries are also eligible for 1 days’ salary per week, which in their case is equivalent to €100 per month.
  • On the other hand, employees working at a Gozo based enterprise are eligible for 2 days’ salary per week, which is equivalent to €320 per month, whilst part time employees are eligible for €200 per month.

The third category is linked to the second one, since it also deals with those industries which have been adversely affected by covid-19.

  • Self-employed persons who have employees and have been adversely hit by covid-19 shall be entitled to 2 days’ salary per week, equivalent to €320 per month.
  • The Government has also made a distinction between those self-employed based in Malta and those self-employed based in Gozo:
    • Gozo based self-employed persons who have employees shall be entitled to €480 per month and if they do not have employees, they shall be entitled to €320 per month.
  • Therefore, by way of comparison, apart from the fact that Gozo based enterprises are given higher supplements, in this case, adversely affected self-employed persons based in Malta, shall not be eligible for any supplement if they do not have employees, whilst Gozo based self-employed persons who have employees, shall still be eligible for €320 per month.

In each given case under the wage supplement measure, the funds shall be forwarded to the Employers who are then obliged to distribute such supplements to their Employees accordingly.

The second corona measure is the Deferral of Payment of Taxes

Through this measure, payments of Provisional Tax, VAT and National Insurance Contribution on Salaries shall be deferred by two months for enterprises and self-employed persons.

Up to now, this measure shall apply for taxes owed until the end of April, however, the Government will be studying further extensions to such period depending on how the situation will evolve.

It is important to note that deadlines for submission of forms should stll be adhered to.

To be eligible, companies and self-employed persons must prove a downturn in their turnover as a result of economic constraints arising from the pandemic.

Therefore, for example, a drop in sales of around 25% or over would render a company or self-employed person eligible for such measure.

The third covid-19 measure is further liquidity initiatives

Liquidity is probably one of the main concerns of various enterprises. We cannot stress enough how important it is for an enterprise to remain liquid, especially in these unparalleled times.

Therefore, for those enterprises requesting operation loans, the Government announced that there shall be allocated €900 million in bank guarantees with low interest rates and longer repayment periods.

In order to ease the burden of bank loans, there shall be a three month moratorium from banks for both business and personal loans.

The fourth initiative relates to social measures

There are four social measures which have been announced by the Government:

The first measure relates to cases in which parents had to stay at home to take care of their children.

In such cases, where both parents work in the private sector, the parent staying at home shall receive a direct payment of around €166 per week.

If the parent works part time, he or she shall receive approximately €103 per week.

Single parent families having school-aged children are also included under this measure.

It is important to note that this measure applies for those who cannot carry on with their work through remote working.

The second measure regards persons with disabilities who work in the private sector and opt to stay home for health and safety reasons. Such persons shall be receiving around €166 per week if they work full time and €103 per week if they work part time.

Through the third measure, those employees who had their job terminated as of the 9th of March, shall be receiving around €166 per week if they were working full time or €103 per week if they were working part time and Self-employed persons are also included under this measure.

The fourth measure is an increase in rent subsidies for those persons who became unemployed.

Quarantine Leave is the fifth measure of Maltese government

Quarantine must be one of the most trending words on social media right now.

So, employers are entitled to a one time grant of €350 for members of their staff who have been on mandatory quarantine leave.

This measure also includes those instances wherein members of staff had to quarantine themselves due to contact tracing.

One must note that this measure is only applicable in relation to full time employees.

The sixth measure is assistance in relation to teleworking activities.

Many enterprises who are able to work remotely have been investing in technology to enable them to carry on with their business.

All those enterprises who opted to invest in technology enabling teleworking, shall be entitled to a grant of up to €500 for each teleworking agreement, and up to €4,000 for each undertaking.

The costs of such investments shall be incurred between the 15th of February 2020 and the 8th of May 2020 and the grant shall cover 45% of such costs.

If an employee had a teleworking agreement prior to the 15th February 2020, such agreement shall not be considered as part of the investment eligible for a grant under this measure.

Should you require any further information or assistance on the Government Aid in relation to the outbreak of the Coronavirus, you can send us an email on or call our offices on 21377700

 

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