German Federal Association of Health Insurance Funds: Financial support through deferral of social security contributions

In order to ease the burden on companies in the current situation, the German Federal Association of Health Insurance Funds (GKV-Spitzenverband) announced in its circular letter of March 25, 2020 that it will temporarily facilitate the possibility of deferring social security contributions. This measure will initially be limited to April 30, 2020. After that, the facilitation will initially only cover social security contributions for the months of March and April 2020.

However, the GKV-Spitzenverband explicitly states that the facilitated access to the deferral of contributions can only be used as an “ultima ratio”. Priority should be given to other support and assistance measures, such as the introduction of short-time work, subsidies and/or loans.

In order to facilitate access to deferment of payment, the employer must demonstrate in an appropriate manner that immediate collection of the contributions would be associated with considerable hardship despite the use of the priority financial support. As a rule, a credible statement that the pandemic has caused considerable financial damage, e.g. through loss of sales, should be sufficient. Proof of applications for supplementary support measures is not required. A declaration that such applications have been made is sufficient. The informal deferment request must be submitted to the employee’s respective health insurance provider(s).

In contrast to the usual deferral agreements, the health insurance companies do not charge deferral interest. In addition, no late payment surcharges or reminder fees will be charged in the period March to April 2020. If late payment surcharges or reminder fees have already been levied, these should be waived at the request of the employer.

However, a deferral of social security contributions is only possible until the granting of short-time work allowance. Deferral should therefore no longer be granted if the employer has received reimbursement of social insurance contributions from the Federal Employment Agency.