Corona emergency aid – who is facing repayment?

In the first months of the Corona crisis, the government granted emergency aid to smaller companies and solo self-employed persons who found themselves in an existential emergency. Eligibility to apply for Corona emergency aid was conditional on the existence of a short-term liquidity shortage. According to the approval notice, all recipients of emergency aid are obliged to check whether the predicted liquidity bottleneck has actually occurred.

Since November 28, 2022, the Government of Upper Bavaria has been sending out reminders of this obligation to verify the Corona emergency aid received. The aim is to ensure that funds have not been paid out unjustifiably or too much.

Now there is a lot of uncertainty: Who has to repay emergency aid in full or on a pro rata basis? How can I find out my actual cash shortage? What is the deadline? We provide answers to the most important questions:

For whom and what was the Corona emergency aid intended?

The Corona emergency aid was intended for companies whose existence was threatened and which had no reserves to fall back on. It was to be used to pay liabilities arising from business-related material and financial expenses. These operating costs include, for example, the operating rent, electricity or telephone. Not, however, personnel costs, depreciation or private living expenses.

The funding amount and eligibility for emergency aid was based exclusively on a liquidity bottleneck in the three months following the submission of the application.

Why are reminders being sent now?

The procedure for checking eligibility to apply for emergency aid was handled very differently in some of the federal states.

For all applicants from Bavaria, there was already an obligation for self-verification.
In Bavaria, the examination of eligibility to apply was previously carried out by means of random checks on individual applicants. Now, on the other hand, all recipients of Corona emergency aid were once again written to and made aware of the obligation to check and, if necessary, repay any emergency aid received in excess.

The subject of the postal letters or e-mails sent out is therefore “Reminder of the obligation to check the Corona emergency aid received”.

How can I determine my actual liquidity shortage?

The liquidity bottleneck within the meaning of the emergency assistance program is calculated from the commercial material and financial expenses (including commercial rents, leases, leasing expenses; important: no personnel costs!) minus the commercial income in the period under consideration. The amount of emergency aid may not exceed the actual liquidity shortage.

The subsequent calculation of the actual liquidity bottleneck on the basis of actual values must be carried out by the recipient of the emergency aid him/herself and on his/her own responsibility.

A calculation aid is available on the website of the Bavarian State Ministry of Economic Affairs, Regional Development and Energy for the subsequent verification of the projected liquidity bottleneck:

Important: Notification of the result of the review can only be made via an online data mask. A personalized link/QR code to the online data mask is listed for this purpose in the reminder letter.

In which cases do I have to (partially) repay the Corona emergency aid?

Overcompensation occurs if and to the extent that the emergency aid received exceeds the calculated liquidity bottleneck.

The decisive factor is the result of the individually filled calculation aid (see note above). If the number “0” is not displayed in the “Overcompensation” field after all figures including the emergency aid received have been entered in the calculation aid, there is overcompensation and the amount calculated must be repaid.

What is the deadline for implementation?

The calculation of the liquidity shortage in accordance with the calculation guide must be carried out immediately after receipt of the reminder letter.

The Ministry of State points out under item 1.7. of the frequently asked questions that “… without delay means without culpable hesitation. This means that if you are currently on the road or on vacation, you can, of course, perform the calculation only when you are back home and have all the documents available. If a supporting third party (e.g. tax advisor) only finds time for this in a few weeks due to scheduling difficulties, then this is also still sufficient. …”

The online data mask is open until 30.06.2023. Until this date is also time for a possibly required repayment.

Do you need assistance?

Since Corona emergency grants are usually applied for directly by the applicants, i.e. without the assistance of a third party reviewer, the review can also be conducted by the applicants themselves.

Many questions are answered in detail in the State Department’s Q&A:

Should you still require assistance, we will of course be happy to help.

Questions about Corona economic aids?

Klaus Nützl

Klaus Nützl
Head of real estate and financing consulting
Managing Director of ACCONSIS GmbH Steuerberatungsgesellschaft 

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+49 89 547143
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