BA Budget

Record Spending in 2020

26 Feb 2021 | Press release no.7

<! [if gte mso 9]><![endif] ><! [if gte mso 9]>Normal021falsefalsefalseDEX-NONEX-NONE<![endif] ><! [if gte mso 9]><![endif] ><! [if gte mso 10]><![endif] &gt;</p><p><strong>The consequences of the pandemic are also affecting the BA’s budget. The BA spent a record amount last year. Expenditures increased especially for short-time working allowances and unemployment benefits.</strong></p><p><strong>Record expenditures as a consequence of the pandemic</strong></p><p>The BA spent €61 billion in 2020 to cushion the impact of the pandemic on the labour market. In 2019, expenditures amounted to €33.2 billion. Expenditures also exceeded the previous high from 2003 (€56.8 billion).</p><p>Last year, the BA earned €33.7 billion. Due to the high expenditures, a deficit of €27.3 billion had to be offset. Just under €20 billion could be used from the reserve, and another €7 billion or so were allocated from the federal budget. This liquidity assistance will be waived for the BA at the end of 2021.</p><p>The reserve, which was saved from employers’ and employees’ contributions, totalled €25.8 billion. The BA will use the remaining €6 billion to make up part of the deficit in the 2021 budget. This part of the reserve was already invested in time deposits and will only be available this year. By the end of 2021, the reserve will be depleted. The BA will start 2022 without a financial reserve.</p><p><strong>Christiane Schönefeld, Chief Financial Officer of the Federal Employment Agency:</strong></p><p>“The BA used a record amount last year to cushion the impact of the pandemic on the labour market. Expenditures on the short-time working allowance were historically high. At the peak, we paid out more short-time working allowance in one day than in the whole of 2019. The expenditures are worthwhile because the short-time work is having an effect. Workers can stay in their jobs and are ready to return to work as soon as the companies are able to do so.</p><p>The reserve of almost €26 billion saved from employers’ and employees’ contributions is now worth its weight in gold and will be put to good use in these difficult times.”</p><p><strong>Especially rising expenditures for short-time working allowances and unemployment benefits</strong></p><p>Due to the lockdown in spring 2020, up to 6 million employees were on short-time work at the peak. As a result, expenditures also rose to a historic high. Last year, the BA paid out €22.1 billion for short-time working allowances. In 2019, the figure was €157 million. During the economic and financial crisis, which had a financial impact between 2008 and 2012, a total of €8.5 billion was incurred for short-time allowance.</p><p>Expenditures on unemployment benefits were €20.6 billion, up from €15 billion in 2019. €1.2 billion were spent on insolvency benefits, compared to €840 million the year before. The reason for the increase of around €300 million is not the pandemic.</p><p><strong>Increased investment in training despite pandemic</strong></p><p>Despite the restrictions due to the consequences of the pandemic, expenditures on continuing education increased by €56 million to €1.5 billion last year. Of this, about €543 million went towards the qualification of employees. Advanced training is important to increase the labour market opportunities of the unemployed or to secure the jobs of employees who would be threatened with unemployment due to structural change, for example.</p><p> </p>