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Idleness benefits planned to be paid in Latvia this week

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state of emergency, support, Covid-19, idleness, coronavirus, wash hands, stay home, business, magenementPayments of idleness benefits for people employed by companies impacted by the Covid-19 pandemic are planned to commence this week, as confirmed by Latvia’s Prime Minister Krišjānis Kariņš after a meeting of government parties.

Kariņš explained that on Tuesday, 24 March, the government will discuss information in regards to progress with development of the idleness programme.

The Cabinet of Ministers also plans to review Economy Ministry’s document that details industries the employees of which may be eligible for idleness benefits. The full list is unknown because, according to Kariņš, Economy Ministry plans to continue discussing the list with social partners and business organizations until the government meeting.

«This week the first payments in relation to this programme are set to commence,» said the prime minister, stressing it is possible there may be proposals for expanding the range of impacted industries.

Welfare Minister Ramona Petraviča says

every day the ranks of unemployed people expand with more people.

To preserve workers and jobs, it is necessary for employers to offer idleness benefits for as long as possible.

The prime minister stressed that work will continue on matters in relation to providing support to the economy and entrepreneurship under conditions of a Covid-19 pandemic. At the same time, Kariņš said the list of industries eligible for support during the pandemic may be expanded.

«Some other industry may be added by the Economy Ministry in the morning on Tuesday,» said the politician, adding he has no specific information on this possibility.

At the same time, on Monday, 23 March, European Commission (EC) admitted that Latvia’s subsidized loan system and loan guarantee system for companies affected by Covid-19 meets the rules for EU state support.

As reported by EC representation office in Latvia, the Executive Vice President of the European Commission Margrethe Vestager, who is responsible for competition policy, has stressed that thanks to these two support activities, Covid-19 affected companies in Latvia will be able to overcome the current difficult situation more successfully.

«Latvia’s planned systems, whose volume reaches EUR 250 million, represent an important contribution towards accomplishing the goal. Our decision is one of the examples of our ability to continue cooperating with member states to ensure timely, coordinated and effective action in relation to temporary regulations for support of new countries,» said Vestager.

Read also: State support for Covid-19 damage reduction reaches more than two billion euros in Latvia

As previously reported, last week the Cabinet of Ministers supported Finance Ministry’s developed legislative draft about prevention of state threats and their consequences from the spread of Covid-19. This programme will include a wide range of state support activities towards preventing the consequences of the disease. This includes paying idleness benefits for employed people.

The legislative draft mentions that if employers of industries from effected industries do not employ their employees or fails to perform the acts necessary to accept the performance of the employee’s obligations, in this case the state will compensate wages up to 75% of the amount but no more than EUR 700 per calendar month.

Last week, Finance Minister Jānis Reirs admitted in an interview to Delfi TV with Jānis Domburs that the idleness benefits may be paid to industries affected by the spread of Covid-19 and up to 150 000 employed people may receive it.

The minister told journalists the government’s supported proposal for payment of idleness benefits may cost the state budget EUR 60 million to EUR 200 million if a decision is made to expand the list of supported industries.

At the same time Latvian Free Trade Unions Association (LBAS) has urged to government to extend the length of payment of unemployed benefits to 12 months and increase the paid amount.

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