"One day more than 2019": BA pays 22 billion euros in short-time work benefits

Friday, February 26, 2021

"One day more than 2019"
BA pays 22 billion euros in short-time work benefits

Securing employment is expensive: In the Corona year, the Federal Employment Agency spends more money on short-time work than ever before. But the investment is paying off, my financial experts. However, the agencies' coffers will be empty by the end of the year.

Due to the consequences of the corona pandemic, spending by the Federal Employment Agency (BA) reached a record level last year. They rose to 61 billion euros and were thus above the previous high of 56.8 billion euros from 2003, as the BA announced. The authority had to take large sums of money, especially for short-time work benefits and unemployment benefits.

During the lockdown in spring 2020, according to the information, at the top six million employees were on short-time work – and the corresponding expenditure rose "to a historic high": the BA paid 22.1 billion euros in short-time work benefits last year. In 2019 it was only 157 million euros; during the financial crisis between 2008 and 2012 it was a total of 8.5 billion euros.

"At the peak we paid out more short-time allowance in one day than in the whole of 2019," said BA CFO Christiane Schönefeld. "The expenses are worthwhile, because the short-time work is effective. The employees stay on the job and are immediately ready for action again when the companies can work again." BA expenditure on unemployment benefits also increased sharply: According to the information, it was 20.6 billion euros last year, after 15 billion euros in 2019.

"By the end of the year the reserve will be used up"

The BA put its income in the Corona year 2020 at just 33.7 billion euros – a deficit of 27.3 billion euros had to be compensated. "Almost 20 billion euros could be used from the reserve, another seven billion euros were allocated from the federal budget," the authority explained. "The BA will issue this liquidity aid at the end of 2021."

According to the information, the reserve of the BA melted down to six billion euros. This money will be used "to compensate for part of the budget deficit in 2021". By the end of the year, the reserve will be used up – "The BA will start 2022 without a financial reserve".

The authority also emphasized that despite the restrictions caused by the pandemic, expenses for further training rose by 56 million euros to 1.5 billion euros in the past year. Of this, around 543 million euros went to the qualification of employees.