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Overview: The Swedish government's aid package for corona-affected companies and employees

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calendar 20 March 2020
globus Sweden

Major economic consequences have already been triggered by the outbreak of coronavirus (COVID-19) which have and will continue to result in significant declines in turnover and redundancies. In an attempt to mitigate the serious consequences currently affecting the labour market, the Swedish government has – together with the social partners - introduced several measures to save companies and employees from bankruptcy and termination. 

As the corona virus outbreak continues in Sweden and the rest of the world, the government has presented several measures in an extra amending budget due to the corona virus. The governments’ aid package is an attempt to ensure that Swedish companies and employees are affected as least as possible by the economic consequences that are currently triggered by the continued spread of the infectious disease. We take a closer look at some of the measures here:

Short-term layoffs (korttidspermittering)   

One of the most interesting measures is the Swedish government’s introduction of a system for short-term layoffs. The purpose is that employees can have their working time reduced, but still receive over 90% of their salary. Furthermore, eligible companies’ salary costs will be reduced by half, by having the state stand for three quarters of the costs. The aim is for affected companies to be able to retain their staff and switch back up quickly when the situation turns. The supporting period will be up to six months, with possibility to extension of three months. Allowance under the system can be applied for from 7 April 2020 and will apply throughout 2020, but the allowance can be granted already from 16 March 2020. Read more to understand if your company is eligible to participate in the scheme here.

Revoked qualifying deduction

Furthermore, the Swedish government has decided to temporarily revoke the qualifying deduction (karensavdrag). Instead, sickness benefit (sjukpenning) will be paid for the first day of sickness. The application for sickness benefit shall be made retroactively to the National Insurance Office (Försäkringskassan), and the company shall make qualifying deduction as usual. This measure is applicable between 11 March and 31 May 2020.

The state takes over the sick pay responsibility for two months

In addition to the above, the Swedish government has announced that it will take over the costs for sick pay during April and May 2020.

No requirement on doctor’s statement from day 8

The Swedish government has further decided to temporarily revoke the requirement that employees must be able to provide a doctor’s statement to the employer from day 8 of the sickness period, in order to be entitled to sick pay (sjuklön). However, a doctor’s statement will still be required from day 15 of the sickness period for entitlement to sickness benefit (sjukpenning). This measure applies between from 13 March 2020 until further notice.

Furthermore, the doctor’s statement required from day 8 of the child’s sickness period, in order to be entitled to temporary parental allowance, will also be revoked. This applies from 19 March 2020 until further notice.

Further measures

Besides the schemes intended to cover costs relating to employees, the Swedish government has introduced several measures to help companies with covering other costs, such as:

  • Deferral with payment of payroll tax, employees’ provisional tax and VAT
  • Loans from banks
  • State credit guarantees to airlines

Many of these schemes do not have a direct impact on the companies’ costs to the employees but should naturally be included in the companies' overall considerations in relation to the opportunities for support.

As the corona virus outbreak continues in Sweden and the rest of the world, the government has presented several measures in an extra amending budget due to the corona virus. The governments’ aid package is an attempt to ensure that Swedish companies and employees are affected as least as possible by the economic consequences that are currently triggered by the continued spread of the infectious disease. We take a closer look at some of the measures here:

Short-term layoffs (korttidspermittering)   

One of the most interesting measures is the Swedish government’s introduction of a system for short-term layoffs. The purpose is that employees can have their working time reduced, but still receive over 90% of their salary. Furthermore, eligible companies’ salary costs will be reduced by half, by having the state stand for three quarters of the costs. The aim is for affected companies to be able to retain their staff and switch back up quickly when the situation turns. The supporting period will be up to six months, with possibility to extension of three months. Allowance under the system can be applied for from 7 April 2020 and will apply throughout 2020, but the allowance can be granted already from 16 March 2020. Read more to understand if your company is eligible to participate in the scheme here.

Revoked qualifying deduction

Furthermore, the Swedish government has decided to temporarily revoke the qualifying deduction (karensavdrag). Instead, sickness benefit (sjukpenning) will be paid for the first day of sickness. The application for sickness benefit shall be made retroactively to the National Insurance Office (Försäkringskassan), and the company shall make qualifying deduction as usual. This measure is applicable between 11 March and 31 May 2020.

The state takes over the sick pay responsibility for two months

In addition to the above, the Swedish government has announced that it will take over the costs for sick pay during April and May 2020.

No requirement on doctor’s statement from day 8

The Swedish government has further decided to temporarily revoke the requirement that employees must be able to provide a doctor’s statement to the employer from day 8 of the sickness period, in order to be entitled to sick pay (sjuklön). However, a doctor’s statement will still be required from day 15 of the sickness period for entitlement to sickness benefit (sjukpenning). This measure applies between from 13 March 2020 until further notice.

Furthermore, the doctor’s statement required from day 8 of the child’s sickness period, in order to be entitled to temporary parental allowance, will also be revoked. This applies from 19 March 2020 until further notice.

Further measures

Besides the schemes intended to cover costs relating to employees, the Swedish government has introduced several measures to help companies with covering other costs, such as:

  • Deferral with payment of payroll tax, employees’ provisional tax and VAT
  • Loans from banks
  • State credit guarantees to airlines

Many of these schemes do not have a direct impact on the companies’ costs to the employees but should naturally be included in the companies' overall considerations in relation to the opportunities for support.

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Anders

Etgen Reitz

Partner

Franziska

Brüggemann

Associate

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