This article is the third in a series of informative articles that I am creating to help self-employed people in Austria who are affected by the COVID-19 pandemic understand their rights and possibilities
*Because this is an unofficial translation, provided purely to help people, please understand that the translation is not perfect.
This information has been primarily extracted from the Chamber of Labour’s (WKO) website on the Coronavirus.
OPERATIONAL RESTRICTIONS EPU (EINZELPERSONUNTERNEHMEN / SINGLE-PERSON BUSINESS)
Is it possible to reduce/defer payments to the Social Insurance Service for Entrepreneurs (SVS)?
Note: Don’t recognize this acronym? On 1 January 2020, SVA and SVB were merged to form the SVS.
Anyone who is directly or indirectly affected by the COVID-19 pandemic due to illness and/or quarantine or who expects massive business losses and, therefore, is experiencing difficulties making SVS payments (contributions) will receive the best possible support from the SVS. Those affected should contact the SVS directly. If necessary, the SVS can offer all SVS-insured persons the following options:
- Deferral of contributions
- Payment of contributions in installments
- Reduction of the provisional contribution base
- Total or partial leniency regarding the interest that accrues for late payment
Applications for deferral of contributions and payment of contributions in instalments can be submitted informally in writing by e-mail.
To apply for a reduction in the provisional contribution base, use the online form. See SVS Online-Forms and the Form for “Anpassung der vorläufigen Beitragsgrundlage zur GSVG-/FSVG- Pflichtversicherung wegen Veränderung der Einkünfte”.
How can I reduce my SVS contributions?
By reducing the provisional contribution base, your current social insurance contributions can be reduced if your current income is lower than it was in the third preceding year (for those who have been self-employed for a longer period of time). The provisional contribution base can generally be reduced at most down to the minimum contribution base. If your provisional contribution base is already the same as the minimum contribution base, it is usually no longer possible to reduce it still further. The reduction of the provisional contribution base can be applied for using the Form for “Anpassung der vorläufigen Beitragsgrundlage zur GSVG-/FSVG-Pflichtversicherung wegen Veränderung der Einkünfte”.
Note: The minimum and maximum contribution base are adjusted each year. You can find the current values on the SVS website.
What support can I receive from SVS I (as a self-employed person / EPU / entrepreneur) fall ill?
If official measures are imposed on you in compliance with the Epidemics Act (quarantine, plant closure, plant restriction), you are entitled to receive compensation for loss of earnings from the Austrian government.
(Note: To learn more about the Epidemics Act 1950 in English, please check this website)
Anyone who is directly or indirectly affected by the COVID-19 through illness and quarantine, or who is expecting massive business losses and, therefore, is experiencing difficulties making payments, will receive the best possible support from the SVS. Those affected should contact the SVS directly by e- mail or phone.
Let’s put this in simpler language
Who am I? I am self-employed or a free-lance professional and, for this reason, am required to carry
the SVS insurance.
Initial problem: From the time my self-employment begins, the Social Insurance Service for Entrepreneurs (SVS) collects my contributions that go into my healthcare (Krankenversicherung), accident protection (Unfallversicherung), and social security (Pensionsversicherung) fund. Because the SVS website is only available in German, it is sometimes not easy for me to find information and understand it.
In addition, my contribution base is currently assessed either upon my most recently available tax assessment (new self-employed persons) or the tax assessment for the third preceding year. For this reason, the assessment of contributions may not reflect my current earnings situation. Bottom line: I expect to earn less this year (due to the COVID-19 pandemic) and cannot meet my payments. Uh oh.
Subsequent problem: Because I cannot meet my (quarterly) payment obligations, I am in danger of being in assessed late fines or fees, having to pay interest on late payments, or going into debt.
What should I do? You can contact the SVS directly by e-mail and request to:
- Defer the payment of your contributions
- Pay contributions in installments
- Reduce the provisional contribution base (because you expect far less earnings this year)
- Request total or partial leniency for interest for otherwise late payments
To apply to reduce the provisional contribution base, you need to use the online form. See SVS Online-Forms and the Form for “Anpassung der vorläufigen Beitragsgrundlage zur GSVG-/FSVG- Pflichtversicherung wegen Veränderung der Einkünfte”. Have a friend (German-speaking) help you fill this out!
What arguments can I use in this e-mail / letter? If you are expecting fewer earnings during the next months (or in 2020) due to the COVID-19 pandemic, carefully list or describe these. For example, you can compare the number of contracts received during the first month of the pandemic with last year’s earnings in that same month (factor in a slight inflation of 3-5%) or describe how you have lost contracts due to the pandemic (resulting in lower expected income). Whichever arguments you use, make sure that you can back these up with written evidence (e-mails of contract cancellations, proof of earnings last year as compared to this year, etc.). If you fall ill due to the COVID-19, try to keep a record of when you fell ill and how long the illness lasted, to be able to provide evidence for how this affected your earnings.
Ok, what do I do next? Keep careful records of when you write to the SVS (print out the e-mail or save it as a document in a special file) and all subsequent communication. You may need to refer back to this (these)! Also make sure you keep records of all communications or evidence of lost contracts, lower earnings… You may be required to supply these as proof.
Keep in mind that (as of the writing of this article), we are only approximately 1 week into the application of formal measures to combat the COVID-19 outbreak in Austria. The full effects of these measures on your earnings may not be truly visible until about a month has passed. It may be advisable to continue collecting information about the impact of the pandemic on your earnings for at least the next month, to provide as proof to the authorities if you are questioned after filing the application to reduce your contribution base.
Anything else? Once you have received a return e-mail from the SVS, make note of the name and e- mail address of the person (SVS representative) who contacts you. Follow up with them on a weekly basis if you do not hear anything. Keep in mind that everyone is scrambling right now to find solutions to the current challenges facing us, so delays are to be expected.
Additional Helpful Information
Sara also translated a helpful article on how the SVS calculates your payments. View this article HERE.
For those of you who are new to self-employment, the ‘SmartMobility’ organization has also provided a helpful overview to social insurance in Austria on this website.
The next article in this series will address issues related to childcare for self-employed persons / EPU: As a self-employed person, am I still entitled to childcare up to grade 8?