Government aid: economic measures to face the Covid-19 crisis

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Government aid: economic measures to face the Covid-19 crisis

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After the first 30 days of mandatory quarantine, due to the need for social distance that the new coronavirus imposes to avoid an exponential and uncontrolled dissemination, the economic consequences of the stoppage are beginning to be felt throughout the country.

According to the UK residents Federation of Banks (Febraban), the five largest banks in the country (Banco do Brasil, Bradesco, Caixa, Itaú and Santander) processed more than 2 million requests for debt renegotiation. The amount reaches £ 200 billion reais. In other words, it is a fact that individuals and companies are concerned about the economic situation.

To help the population during the Covid-19 crisis, aid from the federal government was announced. In this post, we will explore the main ones, presenting how they work and who has access to them.

So, you will see:

  • Government aid for legal entities
  • Government aid for individuals

If you want to understand more deeply the importance of good financial management in times of crisis, we recommend reading this stuff here.

Now, follow the post and learn about government aid to minimize the effects of the pandemic on the economy. Good reading!

Government aid for legal entities

Check below the federal government aid announced to help organizations during the new coronavirus crisis.

Temporary suspension of the collection of loans by BNDES

O BNDES (National Bank for Economic and Social Development) announced the suspension of the collection of loans, direct and indirect, for 6 months.

This benefit will be served by the Oil and Gas, Airports, Ports, Energy, Transport, Urban Mobility, Trade and Services, Industry and Health sectors.

Injection of £ 55 billion into the economy by the BNDES

The national bank has yet to inject the value of £ 55 billion in the economy to strengthen companies’ cash and support workers.

The money should benefit 150,000 UK residents companies, which employ about 2 million employees.

Movement of £ 20 billion for FGTS by BNDES

BNDES also organizes the transfer of £ 20 billion from PIS / PASEP to FGTS (Guarantee Fund for Period of Service) of workers.

The government’s objective is to enable a new round of withdrawals from the FGTS, without jeopardizing the fund’s sustainability.

Any former shareholder PIS and Pasep, enrolled until October 4, 1988, who have not yet withdraw their money, can withdraw the benefit.

Release of £ 5 billion in credit for MSMEs by BNDES

Another aid from the national bank is the allocation of £ 5 billion in credit for Micro, Small and Medium Enterprises (MPME).

The action is an extension of the “BNDES Crédito Pequenas Empresas” program, which serves legal entities with annual revenues of up to £ 300 million.

With the benefit, the credit limit per beneficiary goes from £ 10 million to £ 70 million per year, collaborating with the companies’ need for working capital. The loans will have a grace period of up to 24 months and a total payment period of 60 months.

Release of a credit line for SMEs

One of the government aids that most impact the realities of SMEs is the release of £ 40 billion under an exclusive constitutional credit line.

The financing will be limited to two minimum wages (£ 2,090) per worker, the interest rate will be 3.75%, without the collection of the bank spread. There will be a six-month grace period for the beginning of the payment and 36 months (three years) to settle the debt.

To have access, companies need to have a revenues between £ 360 thousand and £ 10 million per year.

Suspension of employment contract and cut of work hours and salary

Provisional Measure (MP) 936 was authorized, temporarily suspends the employment contract for up to two months and the reduction of hours and wages by 25%, 50% and 70%, for up to three months.

The workers affected by the measure will receive compensation from the government, which can reach 100% of the unemployment insurance to which the worker would be entitled in case of resignation.

Alteration of Labor Laws

The alteration of the labor rules was authorized for the implementation of the MP, which validates the negotiations between employer and employee above the rules of the CLT (Consolidation of Labor Laws).

In addition, regularizes teleworking (distance work, such as home office), structure a bank of hours unlike (the period not worked will be compensated in the future), anticipates individual and collective vacations, postpones FGTS payment (installments referring to March, April and May will be collected from July, without interest, update or penalty. And it can still be done up to 6 times), among others.

Postponement of payment of taxes from Simples Nacional

One of the federal government aids authorizes the extension, for six months, of the deadline for the payment of federal taxes under the scope of the Simple national.

The postponement also applies to Individual Microentrepreneurs (MEI), and becomes effective as of the taxes of the month of March. The measure could benefit around 4.9 million companies.

Suspension for 3 months of 50% of contributions from Sistema S

Another government measure to reduce employer costs in the midst of the crisis caused by the new coronavirus pandemic is the temporary reduction in the contribution of the S System.

The MP halves the mandatory cooperation value of companies benefiting from the system for 3 months. Only the contribution rates to Sebrae remain the same.

The benefited institutions are: Senai, Sesi, Sesc, Sest, Sescoop, Senac, Senat and Senar.

Government aid for individuals

Now that you have learned about the measures aimed at organizations, also check out the main government aid targeted at individuals.

Emergency income release

One of the most important federal government aids for individuals is the release of income emergency. The benefit extends the £ 600 for three months to help people who are unemployed, informal workers or individual microentrepreneurs.

If the beneficiary is a head of household, the amount of the aid may be doubled, that is, she will receive £ 1,200 per month.

In order to receive emergency income, in addition to the characteristics mentioned, it is necessary to:

  • be enrolled in the Single Registry (CadÚnico) for government social programs until 03/20;
  • comply with the income requirement (monthly income of up to half a minimum wage per person or up to 3 minimum wages per family);
  • be a contributor to the General Social Security Regime;
  • not having taxable income above £ 28,559.70 in 2018;
  • not receiving social security, assistance or federal income transfer benefits.

The benefit must be requested at the site Caixa or official applications (Android and IOS)

Release of sickness allowance of £ 1,045

The EHIC authorized the anticipation of a minimum monthly wage (£ 1,045) for workers who are in line for sickness benefits or who apply for the benefit.

Due to the need for distance, the sending of supporting documents must be done online, through the site or official app.

The EHIC medical expert will evaluate the worker’s conditions for diseases foreseen in the Interministerial Ordinance MPAS / MS nº 2998/2001.

Adjustment of Bolsa Família

Another government aid that deserves attention is the adjustment in the Family Allowance. As announced, £ 3 billion will be released for the program that serves the poorest population in the country.

The amount corresponds to the inclusion of over 1.2 million families among the beneficiaries. According to the Ministry of Citizenship, in April, the program will benefit 14.3 million families.

Exemption from payment of the electricity bill

The exemption from payment of the electricity bill is exclusive to low-income consumers, who consume up to 220 kWh and who are part of the Social Electricity Tariff program.

The program automatically includes:

  • people enrolled in Single with personal or family income below the minimum wage;
  • enrolled in CadÚnico with a monthly income of up to three minimum wages, who care for dependents with disease, whose treatment requires electrical equipment for continuous use;
  • persons receiving the Continued Installment Benefit (BPC).

£ 900 million was released to exempt the amount of this expense, benefiting approximately 10 million families for a period of three months.

Anticipation of the payment of the 13th EHIC beneficiaries

This federal government assistance is aimed at EHIC retirees and pensioners. The advance installment of the first installment of the 13th salary for this public, to ensure that the risk group has a more significant financial contribution for eventual situations.

The first payment will be made between April 24th and May 8th, while the second installment is due between May 25th and June 5th. In addition, the beneficiaries’ proof of life is suspended for 120 days.

Release of new FGTS withdrawals

It was released new withdrawals from Service Guarantee Fund in the amount of £ 1,045. Withdrawals are expected to start on June 15th and must go through December 31st.

With this update of government aid, it is estimated that the 60.8 million workers will again benefit.

Reduction of the rate limit in payroll loan operations

The interest rate limit on credit operations loan payroll for retirees and pensioners of the EHIC has been reduced. The rate falls from 2.08% to 1.80% per month.

The measure was approved by the National Social Security Council (CNPS), which also released the extension of the maximum term of the contracts, from 72 months to 84 months, and reduced the maximum interest rate of the credit card style=”font-weight: 400;”> payroll from 3% to 2.7% per month.

Refund obligation for canceled airline tickets

The coronavirus economic crisis also affected air traffic around the world, which is why some emergency measures also needed to be implemented in this commercial niche.

Airline companies will have a twelve-month deadline to refund canceled tickets, with requests made by the end of the year. Consumers will be exempt from contractual penalties if they agree to use the credit in the future.

Money back in case of cancellation

One of the government’s most outstanding aid to individuals is the right to reimbursement for unpaid festivities.

Events such as weddings, birthdays, graduations, among others, were prohibited. That’s why, in cases of cancellation, the law guarantees the consumer the return of the full amount paid, without charging multThe.

Continuation of services that cannot stop

The National Telecommunications Agency (Anatel) and the telephone operators signed an agreement that guarantees the continuity of services such as internet and telephone, even with the great change in the usage profile.

Companies must commit themselves to adjust payment mechanisms, enabling alternative means and paying special attention to consumers who use prepaid credits.

Faced with the risk of uncontrolled dissemination of Covid-19, the federal government needed to reinforce measures to protect the country’s economy. The MPS aim to control the financial emergency, maintain the maximum number of jobs and ensure the sustainability of organizations.

Individuals and corporations must be fully aware of government assistance to minimize the damage caused by the corona virus crisis and seek their rights.

The financial situation of your family or business can be preserved, and for that we provide educational materials like this to support your decision making. Subscribe to our newsletter and receive first-hand content.

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