TOFA New scheme for flex workers | Student with side job eligible for income support through TOFA scheme

Student with side job eligible for income support through TOFA scheme

TOFA New scheme for flex workers
There will be a scheme for flex workers: the Temporary Bridging Scheme for Flexible Workers (TOFA). The TOFA is intended for employees with a flexible contract, who have (almost) no income and cannot receive a benefit due to the corona crisis.

Minister Koolmees of the Ministry of Social Affairs has directed the UWV to implement the temporary scheme for flextime workers, called the TOFA. This scheme allows flextime workers who have had at least €400 in income in February 2020 to apply for income support of max. €550 gross per month for March, April, and May when the coronavirus crisis has prevented them from making any money during this period. This scheme is therefore also available to students with a side job.

The TOFA scheme has been introduced in order to bridge the gap between flextime workers who are entitled to an unemployment benefit and those who are not. Flextime workers who have made at least €400 in February 2020 can apply for a subsidy of max. €550 per month for March, April, and May. The maximum income in April is set at €550 gross. Those with a higher income for April will not be eligible for a TOFA subsidy.

TOFA subsidy is not tax-free

The TOFA subsidy is treated as gross wages and hence subject to taxation and included in financial statements. The subsidy is regarded as wages received from pervious employment with retroactive force. The UWV will be in charge of withdrawing payroll taxes and applying a payroll tax credit. The latter could result in a situation whereby payroll tax credit is applied twice (once with another employer and once with the TOFA subsidy). Because payroll tax credit may only be applied by one employer, this means that the flextime worker receiving the TOFA subsidy may have to pay additional tax when filing his/her income tax return for 2020.

Applications possible from 22 June
The TOFA scheme is estimated to involve €0.2 billion (including implementation costs). Applications for the scheme will be possible for three weeks starting on 22 June 2020.

Source; https://www.rendement.nl/engels/coronavirus and UWV