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One in 10 Austrians registered for scheme aimed at preventing layoffs

VIENNA (Reuters) – Roughly a tenth of Austria’s population is registered for a government scheme aimed at preventing lay-offs that enables employers to keep staff on their books while only paying for hours actually worked, the labour ministry said on Monday.

The scheme, introduced soon after Austria went into coronavirus lockdown roughly a month ago, is a form of ‘kurzarbeit’, or shorter working hours, a model widely used in German-speaking countries.

Employees registered for it and who earn less than 5,730 euros ($6,225) a month gross receive 80%-90% of their salary. The company only pays for hours they have actually worked, and the government makes up the difference.

“The 63,189 (approved company) corona-kurzarbeit applications are securing 871,039 jobs. That is an increase of almost 50% compared to last week,” the ministry for labour and social affairs said in a statement.

That is roughly 9.8% of Austria’s population of 8.9 million, or 19.1% of its workforce of 4.6 million.

Despite the scheme already being in place, unemployment shot up last month to 12.2% by a national measure or more than 500,000 people, its highest level since the data series began in 1946. Hospitality, construction and transport were the sectors with the biggest increases.

When those figures were published on April 1 the minister for labour and social affairs, Christine Aschbacher, said that 250,000 jobs had been registered for the scheme – more than the roughly 200,000 people who registered as jobless in March.

Austria has fared relatively well compared with other European countries in the pandemic, reporting just 470 deaths in total so far, fewer than several larger countries have suffered daily.

As infections are increasing only slowly, it has begun reopening parts of its economy – DIY and garden centres as well as smaller non-essential shops opened last week. Larger shops should follow from May 1.

As more companies have registered for the kurzarbeit scheme, which is part of an economic aid package of up to 38 billion euros, its funding limit has increased from 400 million euros originally to 3 billion euros on April 6 and 5 billion euros on April 14.

“After one month 5.7 billion euros in immediate assistance and liquidity have been funded,” Finance Minister Gernot Bluemel told a news conference, detailing the economic aid provided so far. “If you also include kurzarbeit it is now more than 10 billion euros that have flowed.”

(Reporting by Francois Murphy; Editing by Alex Richardson)

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