Standstill benefits – Shield 3.0
The measures enacted by the Polish government to counter the economic effects of the Covid-19 outbreak cover not only enterprises which create and maintain jobs, but also persons pursuing non-agricultural business operations or perform labour under various civil law contracts (e.g. contracts for completion of a specific task). Such individuals are eligible for “standstill benefits”.
The previous iteration of the anti-crisis legislation, Shield 2.0, introduced an amendment to the effect that this benefit may be accorded three times at the most, the corollary being that the standstill benefit may be applied for on three distinct occasions. The prerequisite for receiving another tranche is comprised in presenting a declaration that the applicant’s financial situation, as presented in the original application, has not improved.
Value of the subsidy
The standstill benefit corresponds to 80% of the minimum wage for 2020 (i.e. to PLN 2,080.00) and is exempted from the various payroll taxes.
An exception from the above is presented in benefits disbursed to entrepreneurs pursuing non-agricultural business operations who are subject to advance payments towards tax on the basis of a tax card [karta podatkowa] and who have benefited from VAT exemptions under specific regulations (arts. 113.1 and 113.9 of the legislative Act regarding VAT). Any standstill benefit received by members of this group is capped at a mere 50% of the minimum monthly wage for 2020 on the grounds that there is no way of verifying their exact revenues.
As regards persons performing commission contracts, contracts for completion of a specific task, and similar civil law contracts, the general 80% cap described above shall not apply where the sum total of their revenues from such contracts for the month preceding that in which they apply for the benefit is less than 50% of the minimum monthly wage for 2020. In such a case, the benefit shall correspond to the sum total of revenues from performance of these contracts.
Who is eligible ?
The standstill benefit may be applied for by persons pursuing non-farming business operations and persons working pursuant to commission contracts, contracts for completion of a specific task, and similar civil law contracts if the Covid-19 outbreak precipitated a halt to activities of, respectively, the person pursuing business operations or the principal. Also, there is the key criterion that the persons seeking standstill benefits may not be subject to mandatory social insurance on another basis. The persons applying for the benefit need not be Polish citizens – foreign nationals legally residing and working in Poland are also eligible.
Apart from the above, the Covid-19 Act defines further criteria, separate for persons pursuing non-agricultural business operations and persons working pursuant to civil law contracts:
- The individual pursuing non- agricultural business operations must have commenced these operations prior to 1 April (rather than 1 February 2020, as previously) and may not have suspended them, and her revenues for the month preceding that in which she applies for the benefit must be at least 15% lower than for the month before (for example, for an application lodged in April, the applicant’s revenue for March 2020 must have dropped by at least 15% since February 2020). Shield 2.0 eliminated the original restriction that this revenue may not be higher than 300% of the average monthly salary for a full-time position for the previous quarter, as announced by the Central Statistical Office for Poland (GUS);
- The standstill benefit may also be sought by individuals who commenced business operations prior to 1 February 2020 and suspended them, but only after 31 January 2020. Also in this case did Shield 2.0 remove the reservation that the revenue achieved in the month prior to that in which aid is sought may not be higher than 300% of the average monthly salary for a full-time position for the previous quarter, as announced by the Central Statistical Office for Poland (GUS).
The requirements described under items a) and b) above shall not apply to entrepreneurs pursuing non-agricultural business operations who are subject to advance payments towards tax on the basis of a karta podatkowa who have benefited from VAT exemptions under specific regulations (arts. 113.1 and 113.9 of the legislative Act regarding VAT).
In the case of individuals performing commission contracts, contracts for completion of a specific task, and similar civil law contracts, the criteria are simpler. Such a person may apply for the standstill benefit as long as her contract was executed before 1 April 2020 and the revenue thereunder for the last month did not exceed 300% of the average monthly salary for a full-time position for the previous quarter, as announced by the Central Statistical Office for Poland (GUS).
The eligibility criteria adumbrated above are not cumulative – any one entity may apply for a standstill benefit on one basis only.
Filing of the application
The application for granting of a standstill benefit is filed with the Social Insurance Institution (ZUS) – personally in the case of persons pursuing non-farming business operations and through the principal / employer in the case of persons performing civil law contracts. The application must be lodged not later than 3 months following the month in which the country was stood down from an epidemic footing. ZUS is obligated by statute to disburse the standstill benefit “promptly upon clarifying the final circumstance necessary for its granting”, – a general legislative formulation, if there ever was one. The standstill benefit is granted by way of an administrative decision, which may be appealed. A standstill benefit may be awarded repeatedly, on the basis of a declaration of the person filing the original application, with the second benefit payable not sooner than in the month following the first one.