25.10.2021

SINCE THE START OF THE 60/40 MEASURE, OVER BGN 1.5 BILLION HAVE BEEN PAID

The "60 to 40" measure remains one of the largest tools for limiting the negative impact of the pandemic on the labor market - since its inception, more than BGN 1.5 billion have been paid to a total of 13.3 thousand employers and nearly 320 thousand workers and employees.

This is stated in an analysis of the measure and the effects of its change, published in the latest newsletter of the National Social Security Institute. According to the findings of the analysis, the changes in the design of the measure, in force since June 1, 2021, were aimed at directing funds to employers most affected by the economic consequences of the pandemic.

The changes coincided with a period of economic recovery and reported growth in gross domestic product of nearly 10 percent on an annual basis, the analysis said. Despite the changes in the design of the measure, there was no deterioration in the labor market, but on the contrary - an increase in employment and a declining number of unemployed registered with the Employment Agency.

From June 1, 2021, some major changes were made in the design of the measure - instead of a 20 percent reduction in sales revenue, the minimum decline in sales revenue that employers must declare in order to receive support was increased to 30 percent; the intensity of the support was differentiated according to the percentage of the declared decrease in sales revenue. Instead of 60 percent of the insurance income of each employee for whom support is eligible, the intensity of support became 50 percent for companies that declared a decrease in sales revenue of not less than 30 percent, and 60 percent - for enterprises that have declared a decrease in sales revenues by not less than 40 per cent.

Preliminary data as of September 30, 2021 show that the total amount of payments relating to June and July decreased to BGN 95.4 million compared to nearly BGN 220.8 million in April and May, i.e. there is a decrease in the average monthly expenditure from BGN 110.4 million to BGN 47.7 million, respectively.

The decrease in the average monthly cost is explained by two reasons: first, a nearly double reduction in the number of employers participating in the measure, and second, a decrease of about 27 percent in the amount that falls on average per employee. On the other hand, the number of employees (on average per employer) increases by about 15 percent, which suggests changes in the structure of supported enterprises according to the number of employees.

Compared to April and May 2021, financial support for June and July 2021 decreases to all economic sectors. As expected, the largest decrease in absolute terms is in the sectors that have received the most funds so far - manufacturing (decrease of BGN 51.4 million), trade (decrease of BGN 16.5 million), transport, warehousing and post offices (BGN 14.0 million), mining (down by BGN 13.2 million), hotels and restaurants (down by BGN 9.0 million).

The change in the design of the 60/40 measure does not lead to significant changes in the distribution of financial support according to the size of the enterprise. Throughout 2021, the largest share of funds is directed to employers providing 250 or more employees. This is logical insofar as: these employers have the largest share of the jobs for which support is provided; the insurance income of the workers and employees working in the large enterprises is higher, which leads to a higher amount of support, falling in one job, the analysis says.