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Study: foreigners rarely high earners

Germany's highest earners are overwhelmingly German nationals, according to an analysis by the national central bank which found that wealth is otherwise very unevenly distributed in Europe's top economy.

Study: foreigners rarely high earners
Photo: DPA

The German Bundesbank has released a detailed analysis of wealth distribution in Germany just weeks after a European Central Bank study found that Germans were on average poorer than their European neighbours.

The analysis, which looks at household and individual income, savings and debts by region, age group, profession and education, also briefly explores the discrepancy between the incomes of German and non-German residents.

Looking at average incomes, Germans earn €10,000 more than foreign nationals working here, taking home an average €44,000 a year as opposed to €34,000 for the average foreigner, wrote Die Welt newspaper on Saturday.

If the median (middle point of a set of numbers) is taken, the difference is even more apparent (€78,000 for Germans and €24,000 for foreigners).

This suggests, unsurprisingly perhaps, that not only are high paying jobs overwhelmingly in German hands, but that there are far more low-paid foreigners in the country than low-paid Germans.

Other findings further supported accepted wisdom about wealth concentration in Germany, with the richest people to be found in the south and west and the poorest in the east.

Seventy-three percent of all households own a car, for example, but in eastern Germany this figure drops to 61 percent and leaps up to 82 percent in the south.

Figures show that most of the south’s privately-held wealth, however, appears to be tied up in property, which is also worth more there.

Yet in general, home-ownership remains much rarer in Germany than elsewhere in Europe and is a privilege reserved for the very rich. Whereas under half (44 percent) of Germans own their own home, this figure soars to 91 percent among the richest ten percent of the population.

Germans’ lack of property is the biggest reason why they appear in European figures to be on average worse off than much of Europe, wrote the paper. By comparison, 83 percent of Spaniards own their own home.

The Local/jlb

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READER QUESTIONS

Reader question: Will retirees benefit from Germany’s energy relief package?

Students, freelancers, benefits claimants and employees are all set to get a financial boost from the German government this year - but have they forgotten about pensioners?

Reader question: Will retirees benefit from Germany's energy relief package?

Record levels of inflation, spiralling energy prices and fears of shortages… the news has been getting worse and worse for consumers in recent months.

At the start the year, the government announced it would be stepping in with numerous measures to help people pay their bills during these difficult months. But as more details of the measures emerged, there appeared to be one major omission: financial support for pensioners.

To find out whether pensioners will benefit from the relief packages, it’s worth taking a look at each of the measures in turn. In most cases, pensions have sadly been left out of the equation, but there are a few things that may help cushion their rising living costs.

READ ALSO:

€9 ticket and fuel tax cut 

We’ll start with the good news: the €9 monthly travel ticket and cut in energy tax on fuel are both designed to benefit everyone, including pensioners.

Unfortunately, the fuel tax cut doesn’t appear to have dampened prices at the pump very much. However, pensioners can enjoy cheap public transport throughout June, July and August with the €9 ticket. 

Überlingen Am Bodensee

Passengers exit a regional train in Baden-Württemberg at Überlingen am Bodensee. Photo: picture alliance/dpa | Felix Kästle

This is obviously great news for retirees who live in cities and parts of the country with good transport networks – but less good news for those who use their car to get around. 

The government’s third mobility measure – an increase in the commuter allowance to 38 cents per kilometre – is also unlikely to benefit the vast majority of pensioners. This measure allows workers who commute long distances to offset some of these costs in their tax returns. 

READ ALSO: Nine of the best day trips from Munich with the €9 ticket

€300 allowance for taxpayers

This flagship energy relief measure – a one-off payment for taxpayers – is another bit of support that pensioners may miss out on. 

The one exception would be pensioners who still work a part-time job to prop up their income.

Even if you’re only working a couple of hours a week, you’ll be entitled to a €300 bonus come September. It’s worth mentioning that this is taxable – but if you don’t earn enough to pay tax, the entirety of the €300 is yours to keep.

However, there may be a way that pensioners can get hold of the money even if they don’t have a regular job. As CDU finance expert Antje Tillmann explains: “It is enough, for example, that a pensioner looks after his grandson for one hour once in 2022 and receives €12 minimum wage from his children in return as part of a mini-job or from self-employment.

“Subsequently, he declares this income in the tax return and gets the energy price lump sum paid out in May 2023.”

READ ALSO: Who gets Germany’s €300 allowance – and when?

One-time heating allowance

As part of its first energy relief package, the government announced that recipients of housing benefit would be eligible for a one-time payment to help with their heating costs.

This is set at €270 for a one-person household and €350 for a two-person household, plus €70 for each additional family member. 

Pensioners who received housing benefit at any time between October 2021 and March 2022 should be eligible for this allowance, as well as people who currently receiving it. 

Pensioner counting money

A German pensioner counts cash in the kitchen. Pensioners who receive social support from the state could be eligible for one-off payouts. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

One-time allowance for benefits recipients

Pensioners who receive Grundsicherung (basic allowance) should be eligible for a one-time lump sum of €200, which will also be paid out to Hartz IV recipients.

Other allowances, such as the €100 Kinderbonus and €100 for people receiving Arbeitslosengeld I, are sadly unlikely to apply to pensioners. 

Scrapping of the EEG levy

The Renewable Energy Act (EEG) levy, which adds about 3.7 cents per kilowatt hour onto consumers’ energy bills, is set to be scrapped on July 1st.

This should benefit anyone with an electricity contract, including pensioners.

Tax relief measures

The government is raising the tax-free allowance for 2022 to €10,347 and raising the value of automatically deductible expenses to €1,200 per year.

Neither of these measures will benefit pensioners who don’t pay tax. 

READ ALSO: KEY POINTS: What Germany’s budget means for you

To sum up: Which measures can pensioners benefit from?

  • €9 ticket (for public transport users)
  • Fuel tax cut (for drivers)
  • Scrapping of EEG levy 

Pensioners claiming welfare could also benefit from:

  • €270 allowance for housing benefit recipients, and
  • €200 allowance for Grundsicherung recipients

Pensioners do seem to be getting a slightly raw deal in comparison to those in employment. However, there are some general measures they may benefit from, and those who are already getting help from the state should also receive a small income boost. 

READ ALSO: EXPLAINED: Germany’s plans to ditch sanctions for the unemployed

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