For the self-employed: how to get a subsidy during the period of quarantine?
During emergencies and quarantine, the state provides support to the self-employed. Applications for benefits are available to the self-employed from 5 April.
We invite you to get acquainted with the application procedure prepared in accordance with the draft Law on Employment, which is adopted by the Seimas in 2020. April 7.
Who is entitled to the benefit?
The right to receive the benefit belongs to self-employed defined in Paragraph 9 of Article 2 of the Law on State Social Insurance of the Republic of Lithuania:
- individual business owners;
- members of small partnership;
- full members of econimic partnerships and limited partnerships;
- persons engaged in individual activities as defined in the Law on Personal Income Tax of the Republic of Lithuania (lawyers, assistant lawyers, notaries, bailiffs, persons with business licenses and other persons);
- natural persons engaged in individual agricultural activity, when the economic size of the agricultural holding or farm according to the calculations performed by the State Enterprise Agricultural Information and Rural Business Center for the tax period of the previous year from 1st of January until 31st of December is no less than 4 economic size units;
- family participants as defined in the Law on Families of the Republic of Lithuania;
- persons receiving income under copyright agreements or income from sports or performer activities;
- holders of business licenses (excluding business licenses for the rental of premises).
Self-employed persons must meet all of the following conditions:
1) their independent activities have been registered for a period of at least 3 months within 12 months and have not been deregistered before the date of declaration of the emergency situation and quarantine announced by the Government of the Republic of Lithuania;
2) during the emergency situation and quarantine announced by the Government of the Republic of Lithuania, does not work under an employment contract or does not have legal relations equivalent to employment relations and does not receive income related to employment relations;
3) in the case of a legal person, does not have the status of a company in liquidation or bankruptcy.
One benefit is granted and paid to one self-employed person, regardless of the number of self-employed activities.
The benefit will also be available to persons exempt from social security contributions: pensioners, the disabled who have started their activity for the first time.
Where and how to apply for the benefit?
You must apply to the Employment Services for a benefit by submitting a completed application form for a self-employed benefit. The application can be submitted to the Employment Services in the following ways:
- A self-employed person who is not registered with the Employment Services before the day of submitting the application may submit the application electronically using the electronic service “Registration with the Employment Service” available on the Employment Services website by selecting the active link Register with the Employment Service.
You must connect via the external Employment Service portal, select to Register via the Electronic Government Gateway Portal – „Registruotis per Elektroninių valdžios vartų portalą“.
- Prior to the date of application, a self-employed person registered with the Employment Service may submit an application by contacting his / her specialist, who will provide information on how to submit an application. Applications will be available for:
- from the e-mail specified in the registration card of the person seeking his / her job, by sending a completed application to the employment service department performing the customer service functions in which the person is registered;
- by sending a completed and signed application by post to the employment service department performing the customer service functions in which the person is registered.
Contact details for customer service departments can be found here.
An application for a benefit for a self-employed person can be submitted only once.
When and at what rate is the benefit granted?
Within 3 working days, the Employment Service will assess whether the applicant meets all the conditions specified in Paragraph 1 of Article 51 of the Law on Employment of the Republic of Lithuania and will make a decision to grant or not to grant a benefit to a self-employed person.
The amount of the benefit for self-employed persons is equal to one of the minimum consumption needs of the current year – 257 Eur. If the term of the emergency situation and quarantine announced by the Government of the Republic of Lithuania is shorter than a calendar month, the amount of benefits paid to the self-employed person for that month shall be reduced proportionately.
Who grants and who pays the benefit?
The decision on granting the benefit is made by the Head of the Client Service Division of the Employment Services, paid by the Board of the State Social Insurance Fund or the administrative institution appointed by it of the State Social Insurance Fund.
The benefit can be recovered if it is established that it has been paid illegally because the person has provided incorrect information when applying for the benefits. Recovery procedures are carried out by the Board of the State Social Insurance Fund.
When the payment of the benefit is stopped?
Payment of the benefit shall be terminated within 1 working day if at least one of the following grounds arises:
1) the Government of the Republic of Lithuania revokes the emergency situation and quarantine or the term for declaration of at least one of them expires;
2) the person no longer meets at least one of the conditions established in Paragraph 1 of Article 51 of the Law on Employment for granting and paying the benefit to a self-employed person.
FREQUENTLY ASKED QUESTIONS
Where can an author, athlete, or performer check whether subsidies are calculated from 3 minimum monthly wages (MMA)?
Insured income from which all social insurance subsidies have been calculated could be found at www.sodra.lt webpage. Login to Your Sodra system as “Insured” and compile the summary REP.04 “Information on state social insurance“. Formulation period from 06/03/2019 to 16/03/2020.
I owe state social insurance (SODRA) and compulsory health insurance (PSD) contributions, can I get a subsidy of 257 EUR?
Your arrears to the state budget of the Republic of Lithuania and the state social insurance fund will not be assessed. The benefit will be due if:
- self-employment activity was registered for at least 3 months during the last 12 months and has not been terminated until the emergency situation and quarantine announced by the Government of the Republic of Lithuania;
- you did not have an employment contract or any legal relationship equivalent to an employment relationship during the period of emergency situation and quarantine
- self-employment is not in liquidation or bankrupt status.
I am working under author’s contract (I am an athlete, a performer). Will I get a subsidy of 257 EUR?
The subsidy will be paid if:
- the 13-SD notifications were submitted and the social security payment was paid from an amount of at least 3 minimum monthly wages (MMA);
- you are not related to employment relations with the policyholder during the declared emergency situation and quarantine.
Will the subsidy of 257 EUR for the self-employed persons be included in the insured income for calculating non-pension/ pension subsidy or work experience?
The subsidy of 257 EUR will be not included in the insured income, it will not affect any paid pension/non-pension subsidy.
Will the subsidy of 257 EUR affect the amount of unemployment benefit?
The benefit for a self-employed person will not be included in the insured income.
Is it possible to receive unemployment benefit and a subsidy of 257 EUR for a self-employed person?
This subsidy does not affect the unemployment social security benefit, so a person can receive both unemployment social insurance benefit and self-employed subsidy.
Till when do I have to submit a request for Employment Services in order to get the subsidy for self-employed person?
Self-employed people should submit requests for 257 euro subsidy during the month of April.
What people, who have a business certificate and whose activities are restricted due to the quarantine, can do?
If the person had a business certificate and due to the quarantine its activities were restricted, the person should evaluate himself whether he will be able to carry out the activity without prejudice to quarantine conditions, for example, remotely or the other way. However, if the person cannot carry out the activity and he decides to terminate his business certificate, he can recover overpayment or it can be credited to another business certificate, when it will be possible to engage activities.
In order to terminate the business certificate electronically, you should connect Mano VMI and to submit a request. It is important to note that if you do not carry activities from the 16th of March it is possible to terminate your business certificate retroactively. In this case people should call tax information center 1882 / +370 5 260 5060 or to submit an electronic inquiry via Mano VMI and your request will be registered and the activity will be terminated from the 16th of March.
Is the subsidy of 257 EUR granted to self-employed persons subject to personal income tax?
No, this benefit is not taxable. In accordance with Item 5 of Paragraph 1 of Article 17 of the Law on Personal Income Tax, the subsidy granted by the Employment Service to self-employed persons shall be considered as non-taxable income, and the subsidy to persons with individual activity certificates shall be considered as non-taxable income too.