The government support and recovery package – latest developments

Following the extended lock-down and the curfew imposed until 10 February, the cabinet announced on 21 January that the support and recovery package for jobs and the economy would be extended (again). In this article we provide an overview of the most relevant measures and current changes compared to the earlier package.

  • Temporary emergency scheme for job retention (NOW)
  • Reimbursement Fixed Costs Scheme for SMEs and self-employed professionals (TVL)
  • Stock compensation for closed retail sector
  • Travel allowances
  • Work-related costs scheme
  • Business start-ups
  • Deferred payment of tax debts
  • Customary wage for directors and major shareholders
  • Hour criterion
  • Other tax measures
  • Temporary bridging scheme for self-employed entrepreneurs (Tozo)
  • Temporary Support Necessary Costs (Tonk)
  • Additional aid per sector

Temporary emergency scheme for job retention NOW)

The government will increase the reimbursement rates of the NOW-3 grant in the second and third period from 80% to 85%. From 15 February onwards, the NOW compensation for the months of January, February and March 2021 can be applied for. The previously announced scaling-down of the NOW scheme for the third tranche will be abandoned. For clarification see schedule below (adjustments in bold)

First period Second period Third period
Timeframe October – December 2020 January – March 2021 April – June 2021
Compensation rate 80% 85% 85%
Total wage bill exemption 10% 10% 10%
Minimum loss in turnover 20% 20% 20%
Fixed supplement 40% 40% 40%
Maximum wage compensation 2x daily wage 2x daily wage 2x daily wage


Reimbursement Fixed Costs Scheme for SMEs and self-employed professionals (TVL)

The subsidy percentages of the Fixed Charges Allowance (“TVL”) will be increased. These adjustments will apply both to the first and the second quarter of 2021. Due to this increase, entrepreneurs whose turnover has dropped by more than 30% will receive an allowance of 85% of the fixed costs. The reference period for the turnover will be 2019. The government reasons that entrepreneurs have already seen their turnover decrease early in 2020 as a result of the corona crisis. Also, from the first quarter, the TVL will be open to companies with more than 250 employees. Previously, only companies with less than 250 employees were eligible. The maximum compensation amount will be increased to € 330,000. The Cabinet is currently exploring the possibilities of lowering the minimum threshold of €3,000 for fixed costs, because some small entrepreneurs do not qualify for the TVL due to too low fixed costs. In its letter to the Lower House, the Cabinet uses calculation examples to illustrate the impact of the increase in the compensation percentages on the level of compensation.

See below for an overview (adjustments in bold):

Timeframe June – September 2020 October – December 2020 January – March 2021 April – June 2021
Limitation sectors Yes No No N0
Minimum loss of turnover 30% 30% 30% 30%
Compensation rates 50% 50-70% 85% 85%
Maximum amount € 50.000,- € 90.000,- €330.000,- €330.000,-
Minimum amount fixed charges (per 3 months) € 4.000,- € 3.000,- € 3.000,- € 3.000,-
Maximum number of employees 250 250 n/a n/a
Minimum compensation € 750,- € 750,- € 1.500,- € 1.500,-


Stock compensation for closed retail sector

Due to the compulsory closure of a large part of the retail sector in December 2020, which is still ongoing, the cabinet has decided to extend the stock compensation for closed retail trade. The compensation will amount to a 21% supplement on the TVL fixed charge rate (previously this was 5.6%). Please note that this extension only applies during the first quarter of 2021. No separate application is required for this compensation. It is automatically included in the application for the TVL. This supplement has a separate maximum payment of € 200,000, which falls outside the above-mentioned maximum of the TVL.

Travel allowances

As announced, the cabinet would decide by 1 February 2021 how long the fixed travel allowance can still be reimbursed untaxed by the employer. Employers can reimburse their employees untaxed until 1 April 2021. Condition is that the fixed allowances must already have been granted by the employer to his employees before 13 March 2020.

Work-related costs scheme

The free margin in the work-related costs scheme will be extended. This extension already applied in 2020 but is now extended for 2021. This means that the free margin will now temporarily be increased to 3% for the first € 400,000 of the wage bill, instead of 1.7%. In addition, the Cabinet is currently investigating, in consultation with social partners, the possibilities of a supplementary scheme whereby other home office expenses – which are currently not covered by the work-related costs scheme – can be compensated untaxed.

Business start-ups

The government is also a