On 9 August 2023, the National Assembly adopted the Act on Amendments and Additions to the Natural Disaster Recovery Act (the “Act”), which entered into force on 11 August 2023. The Act establishes the possibility of a rapid and effective elimination of damage resulting from natural disasters.
The main amendments introduced by the Act in the light of this year’s catastrophic floods are as follows:
- The possibility of allocating funds from the state budget for disaster recovery before the final assessment of the direct damage has been confirmed. This allows municipalities to receive advance funding of up to 40% of the preliminary damage assessment to carry out urgent rehabilitation measures. This will then be followed by the usual procedure for preparing the final damage assessment and the final disaster recovery programme. This innovation applies to all natural disasters as from 1 January 2023.
- Allocation of resources to remedy the consequences of adverse climatic events which are insurable and eligible for State aid, in the form of co-financing of insurance premiums to insure agricultural production.
- The granting of aid under the ‘de minimis’ rules also for those agricultural holdings whose agricultural crops are 100 % damaged.
- To remedy damage to the economy caused by natural disasters, companies, entrepreneurs, individuals, institutions and cooperatives established in the Republic of Slovenia may be granted non-repayable (subsidies) or repayable (loans, guarantees) funds, either in the form of loan funds or guarantee schemes.
As mentioned above, the above amendments apply to all disaster recovery cases in 2023, but the Act also establishes the following additional emergency intervention measures to deal with the consequences of the floods in August 2023, which relate to assistance to the economy, employees and the self-employed.
Employers are entitled to full reimbursement of wage compensation paid to workers who are unable to work during the period from 3 August 2023 to 31 December 2023 due to force majeure in the form of the consequences of the floods in August 2023, and are also entitled to partial reimbursement of wage compensation paid to workers on temporary lay-off because their employers are temporarily unable to provide them with work due to the consequences of the floods, until 31 October 2023 at the latest, with the Government being able to extend the measure until 31 December 2023.
Workers are entitled to wage compensation of 80% of their base salary during the period of their inability to work and waiting for work due to the effects of the floods in August 2023.
During the period of the aid, the employer may not terminate the employment contract for business reasons of the workers for whom the reimbursement of the wage compensation has been claimed, nor may there be any payment of profits, purchases of own shares or own shares in the business, payments of bonuses to the management for 2023 as from 3 August 2023, otherwise the employer must return the reimbursements. The employer will also not be able to claim, inter alia, reimbursement of compensation for an employee who, as a result of a natural disaster, is prevented from working during the period of notice.
As the reimbursements are considered State aid, the sum of the reimbursements must not be higher than the actual damage.
The Act entitles volunteers who carry out voluntary work in the framework of a voluntary organisation to 100% paid leave of absence from work for a maximum of 7 working days to deal with the consequences of flooding.
The one-off solidarity grant for serious damage to an employee caused by the natural disaster of the floods in August 2023, paid by employers in 2023, is not countable against the taxable amount of employment income up to EUR 10,000, according to the Act.
The Act also provides for assistance to self-employed persons who were registered to carry out an activity no later than 1 July 2023 until the entry into force of the Act and who, as a result of the consequences of the floods, are unable to carry out their activity or carry it out to a significantly reduced extent. The Act grants aid for August, September, October, November and December in the amount of EUR 1,200 per month. The aid will be exempt from all taxes and contributions.
The Act also provides for temporary measures in the area of the economy, namely: (1) liquidity measures in the area of the economy; (2) transitional regulation of the threshold value for public procurement in cases of major disaster recovery; (3) (non-)application of contractual penalty provisions in cases of major disaster recovery; (4) raising the level of the estimated value for public works procurement in cases of major disaster recovery.
Taking into account the predicted climate change and the increasing occurrence of storms causing significant damage to property, the adopted Act represents an important step towards enabling a more rapid recovery of the situation in areas affected by natural disasters.