OVER 1,100 bars and restaurants have been ordered to re-pay financial compensation they received for the shutdown of the restaurant industry in the summer of 2020, reports YLE.
Keha, the administrative and development centre for ELY Centres and TE Offices, disbursed compensation to roughly 7,800 companies in the restaurant industry for the revenue losses caused by the industry-wide shutdown. Almost 1,150 of the companies, however, received more compensation than they were entitled to – on average 15–25 per cent more.
Requests for re-paying the excess amount were sent out a year ago, but about 500 companies have yet to make the re-payments. Over 100 of them have consequently been subjected to enforcement procedures, according to Keha.
Restaurants in Finland were only allowed to sell to takeaway customers between April and May 2020.
Restaurants were entitled to financial support for the duration of the shutdown based on their revenue losses and their number of employees. The excess payments are linked to revenue-loss compensation paid automatically to companies, without an application, based on an estimate that revenues would plummet by 75 per cent.
Made by the Ministry of Employment and the Economy, the estimate was clearly too high for a number of companies, revealed the revenue data provided by the companies as part of applications for additional compensation for revenue losses.
“In hindsight it’s possible to state that companies survived the restriction period much better than feared,” Pauliina Smolander, the paying director at Keha, commented to YLE on Sunday.
Such examples include companies with an emphasis on takeaway food and, for instance, hamburger chains.
No overpayments have been detected in the application-based revenue compensation and re-employment support paid to companies.
Smolander revealed that about a half of the recipients of excess compensation paid back the excess amount shortly after the initial notice. About 650 companies were brought into the interview and recovery procedure on grounds of no payment, with roughly a quarter of them subjected to enforcement measures to date.
“Overall we’re talking about more than 100, but less than 150 companies,” said Smolander.
Others, meanwhile, are devising re-payment plans.
Finnish restaurants received a total of 72 million euros in compensation for revenue losses, including three million euros in unwarranted compensation. The excess amounts were mostly in the 100–1,000-euro range, but the single largest amount was approximately 200,000 euros. No re-payment requests were sent to the some 100 companies also received less than 100 euros in excess compensation.
Although it is not a question of massive sums for many, the coronavirus epidemic has left several restaurants between a rock and a hard place, reminded the Finnish Hospitality Association (Mara).
“There are a lot of unpaid bills, including rents and other unpaid commitments. In that sense, all payments are difficult at this moment,” Timo Lappi, the managing director of Mara, explained to YLE.
Both Lappi and Smolander viewed that it was nevertheless important to disburse the compensation quickly in response to the sector shutting down in the face of restrictions.
“The situation was catastrophic, restaurants were shut down and we had to make sure restaurants were supported. The pressure put the money in motion was high,” said Smolander. “The idea was absolutely good,” echoed Lappi.
Aleksi Teivainen – HT