German State Aid – Kurzarbeitergeld - Specifics On Insolvency Protection

Russia's invasion into Ukraine and the global disruptions in supply chains following from Putin's aggression intensified the pressure on practically all production lines. So, while the pure Corona related simplified regulations regarding short-time work benefits will expire on 30 June 2022 – as planned – short-time work benefits will continue to be available for companies if 10 percent of the staff of a company are affected by loss of work.

Closing our series on "German State Aid" we will focus now on specific questions which were raised during our online webinar.

What happens if a company falls into insolvency" while employees are still in Kurzarbeit?

In the worst case, employees may be barred from insolvency allowance (Insolvenzgeld) if they are collecting short-time work allowance (Kurzarbeitergeld). The reason for this result lies in the definition of insolvency allowance replacing wage. This risk is foremost given in the event of Kurzarbeit Null", the