The coronavirus pandemic has led to significant economic upheaval worldwide. To cushion the negative economic impact, the German government has launched a variety of aid programs. One of the most prominent programs was the Corona Emergency Aid, which was designed to provide rapid financial support, particularly to small businesses, the self-employed, and freelancers. However, the payment of the aid was also accompanied by numerous claims for repayment and legal challenges. This article provides an overview of the Corona emergency aid, the reasons for claims for repayment and the options for contesting them.
The Corona emergency aid
The Corona emergency aid was launched in March 2020 to cover the immediate liquidity needs of small businesses, self-employed and freelancers. The aid was provided in the form of non-repayable grants, which varied depending on the federal state and the size of the company.
Target group
- Small companies with up to 10 or 50 employees (depending on the funding program)
- Self-employed and freelancers
- Agricultural businesses and creative professionals
Funding amount
- Up to €9,000 for companies with up to five employees
- Up to €15,000 for companies with up to 10 employees
- In some federal states, there were additional programs with higher funding amounts
Reclaims of the Corona emergency aid
Despite the rapid and unbureaucratic payment of the emergency aid, numerous claims for repayment were made afterwards. These claims can have various reasons:
False information provided in the application
- False or incomplete information: If it turns out afterwards that false or incomplete information was provided at the time of application, the emergency aid can be reclaimed.
- Lack of economic hardship: If the applicant cannot demonstrate sufficient economic hardship to justify the emergency aid.
Use of funds
- Misappropriation: The emergency aid had to be used for a specific purpose, i.e. for operating expenses such as rent, lease payments or current operating costs. Use for private purposes is not permitted and can lead to a reclaim.
- Double funding: If companies have taken advantage of several aid programs at the same time that overlap, this can also lead to a repayment claim.
Subsequent review
Audits by the authorities: The relevant authorities have the option of checking the applications retrospectively and, in the event of discrepancies, to initiate a reclaim.
Appealing against recoveries
If a company or self-employed person receives a reclaim of the Corona emergency aid, there is the possibility to contest it. The contestation can be done in different ways:
Objection
- Objection: An objection can be lodged against the recovery notice within one month of its delivery. The objection should be made in writing and state the reasons for the challenge.
- Reason: It is important to provide detailed reasons for the appeal and, if necessary, to attach evidence to support the accuracy of the original information.
Appeal to the administrative court
- Appeal to the administrative court: If the objection is rejected, there is the possibility of lodging an appeal with the competent administrative court. Here, too, a deadline of one month after notification of the objection applies.
- Legal advice: It is advisable to seek legal advice when filing a lawsuit in order to increase the chances of success.
Hardship case regulations
Hardship application: In some cases, those affected can file a hardship application to mitigate or avoid a repayment claim. This is particularly possible if repayment would pose an existential threat to the company.
Conclusion
The Corona Soforthilfe was an important instrument for supporting small businesses and the self-employed during the pandemic. However, recoveries and challenges have shown that providing quick and unbureaucratic assistance also presents legal challenges. Companies and self-employed people who are confronted with claims for repayment should examine their legal options and, if necessary, file an objection or take legal action.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.