Special Edition on COVID-19, no. 4

25. November 2021 | Reading Time: 4 Min

Compensation bonus for 2022

The government presented to the Chamber of Deputies a draft of the fourth Compensation Bonus Act (Parliamentary File No. 50). A compensation bonus for 2022 is at issue.

Self-employed persons (OSVČ) and partners of limited liability companies (s.r.o.) will be able to apply for CZK 1,000 per day, whilst workers on contract outside an employment relationship (so-called contractors) and entrepreneurs in quarantine or isolation will be entitled to CZK 500 daily. It will first be possible to apply for the first bonus period, which is set by law from 22 November to 31 December 2021 (i.e., 40 days). The Act further sets the second bonus period from 1st to 31st January 2022 (i.e., 31 days). Depending on the development of the pandemic situation, the next bonus period may be announced by government decree, always for one calendar month, until the end of 2022 at the latest.

The claim to a compensation bonus will be tested on drop in income corresponding to turnover by at least 30 %, and this in a compared period against the average monthly income amount in the comparative period. The compared period is the calendar month of the bonus period, therefore December 2021 or, more precisely, January 2022. Afterwards, the comparative periods are any three consecutive months during the relevant period from June to October 2021. An exception is entrepreneurs who cannot perform activities during summer, whose comparative period is the last winter period prior to the outbreak of the pandemic.

Entrepreneurs who have an active trade licence as of 22 November 2021 or who have had it interrupted for no longer than one year will be entitled to the new compensation bonus, which takes into account the specifics of seasonal entrepreneurs. The enterprise, however, in the same way as until now, has to represent the main source of income for applicants, which will continue to be verified by a test of majority of income in the chosen comparative period.

As with the previous compensation bonus, and in view of the increase of aid to CZK 1,000 daily its reciprocal incompatibility with subsidy programs, with the exception of the Antivirus program, remains. Participation of the trader in sickness insurance remains a necessary condition.

The new compensation bonus will once again technically be a refund of income tax from gainful employment, which the financial authorities will pay out against a request confirmed by an affidavit. But the Financial Administration will retain a simple online request also accessible at www.mfcr.cz/bonus. Filing the request will continue to be possible by email, data box, post or personally at a Financial Authority registry.

Launch of the requests and their subsequent pay-out is at present dependant on the development of the legislative process in Parliament. It generally applies, then, that the request can be filed at the earliest after the end of the given bonus period so that the turnover amounts where a drop occurred can be stated in the request.

Allowance during ordered quarantine or isolation returns

Another draft Act which has been submitted to the Chamber of Deputies is Parliamentary File No. 50, which is again to implement a special allowance to employees during ordered quarantine, thus so-called isolation.

An employee, for whom a claim to income compensation has arisen due to ordered quarantine, will be entitled to an allowance of CZK 370 per calendar day, but at the most over a period of the first 14 calendar days of the duration of the ordered quarantine. If the sum of the allowance and the income compensation exceeds 90% of the employee’s average earnings, the allowance will be reduced. The allowance will be paid out by 30th June 2022 at the latest.

The allowance will be payable under this Act also for calendar days prior to the effective date of this Act if the quarantine was ordered after 31st October 2021, and the quarantine continues at least through the effective date of this Act. The cost of the allowance will not be borne by the employer, for the employer will be able to deduct the amount paid from social security contributions and state employment policy contributions.

Reintroduction of the crisis allowance

The third bill submitted to the Chamber of Deputies is a proposal to reintroduce the crisis allowance (Parliamentary File No. 49). With this proposal, parents who are at home with their children will be entitled to a caregiver’s allowance for the duration of a school or classroom closure or when an individual child is ordered to be quarantined. The caregiver’s allowance will be increased to 80% of the daily assessment base. Parents will receive at least CZK 400 daily. The crisis caregiver’s allowance will also apply to so-called contract workers who pay insurance.

Proposed parameters for crisis care:

  • Parents will be entitled to a caregiver’s allowance when caring for a child under the age of 10, as is the case with the standard caregiver’s allowance.
  • The caregiver’s allowance will amount to 80% of the reduced daily assessment base.
  • The minimal daily caregiver’s allowance amount has newly been fixed at CZK 400. This is for employees in employment or in a service relationship who are employed full-time, although the daily amount paid would be below this limit.

In addition to employees, persons working under an agreement on the performance of work or work activity will also be entitled to the caregiver’s allowance if they pay social security contributions.

All of the above bills are being submitted by the Government to the Chamber of Deputies with a request to negotiate them in legislative emergency so that their effects can appear soon as possible.