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August 11, 2026
A hairdresser, a café owner, and the manager of a carpet cleaning company are repaying their COVID-19 emergency aid in installments. The compromise was proposed by the Neustadt Administrative Court (Rhineland-Palatinate).
In Rhineland-Palatinate, numerous legal proceedings are currently underway to reclaim COVID-19 emergency aid . In Neustadt an der Weinstraße, the parties involved reached an agreement for the first time on installment payments, following a proposal from the Neustadt Administrative Court . A hairdresser, a café owner, and the managing director of a carpet cleaning company had filed suit, demanding full repayment of the liquidity assistance provided in March and April 2020 to micro-enterprises, the self-employed, and freelancers.
In their application for federal Corona emergency aid submitted to the Investment and Structural Bank of Rhineland-Palatinate (ISB) in March and April 2020 respectively, the three plaintiffs stated that their income in the following three months would not be sufficient to cover the material and financial expenses of their business.
Later, during the final settlement, the ISB (Investment and Structural Bank of Rhineland-Palatinate) asked the businesses to specify their actual income and expenses at that time. In all three cases, the development bank calculated that income had exceeded expenses and therefore there had been no liquidity shortage . It demanded that the plaintiffs repay the full amount of the COVID-19 emergency aid (9.000 euros or 15.000 euros, respectively).
The hairdresser, the café owner, and the managing director challenged their respective repayment demands by filing a lawsuit with the Neustadt Administrative Court after their initial appeals were unsuccessful . They pointed to the economic consequences of the repayments , arguing that they would have to lay off employees or even file for bankruptcy.
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They also argued that other federal states (such as Baden-Württemberg) had waived their right to repay the funds or that the courts there had deemed such demands unlawful. Another point of contention was that the ISB had not included personnel costs and entrepreneurial wages in its expenditure calculations.
In the oral proceedings, the Administrative Court pointed out that the ISB (Investment and Structural Bank of Rhineland-Palatinate) had explicitly granted the COVID-19 emergency aid only provisionally in 2020 and had announced a final review. Furthermore, there were strong indications that the plaintiffs would ultimately have to repay the COVID-19 emergency aid.
The ISB (Investment and Structural Bank of Rhineland-Palatinate) made it clear from the outset that personnel costs and entrepreneurs' wages should be covered by short-time work compensation and social benefits. Furthermore, the practices of other federal states are not binding for them. The processing, review of liquidity shortages, and any potential repayment procedures for the COVID-19 emergency aid are the responsibility of the individual states.
However, the Neustadt Administrative Court ruled that the companies' financial situation had to be taken into account. Therefore, the parties agreed to installment payments at the court's suggestion.
The second chamber of the Administrative Court is expected to hear three further lawsuits on September 24, 2026, brought by a sausage and meat products dealer, a real estate agent and a hairdresser, against the demand for repayment of Corona emergency aid.
At the Neustadt Administrative Court alone, a total of 32 lawsuits are currently pending against demands for repayment of COVID-19 emergency aid. The court expects numerous further lawsuits to follow, including those concerning the repayment of other COVID-19 bridging aid.
In Trier, the local administrative court also rejected a business owner's lawsuit against the repayment of COVID-19 emergency aid only at the end of July 2026. The plaintiff had received €9.000 in emergency aid. After reviewing the actual liquidity shortfall, the ISB (Investment and Structural Bank of Rhineland-Palatinate) finalized the amount of emergency aid at approximately €5.550 in its final decision of February 2025 and demanded repayment of the excess amount of almost €3.450. The plaintiff's liquidity shortfall in the month of application and the two following months was less severe than initially predicted.
The plaintiff argued that he had relied primarily on public statements by the federal government to believe he would be allowed to keep the full amount of the COVID-19 emergency aid. The judges of the eighth chamber disagreed. They ruled that the emergency aid granted in spring 2020 was clearly only provisional and therefore legally sound. The parties involved can currently still appeal this decision to the Higher Administrative Court of Rhineland-Palatinate.
Source: Administrative Court of Neustadt an der Weinstraße; Administrative Court of Trier
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