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How much money will you get from Germany’s energy relief measures?

The government is providing financial relief to people in Germany to help with rocketing energy prices. They've released calculators to give you an idea of how much cash you'll pocket.

A person holds a handful of cash.
How much will you save through the energy relief measures? Photo: picture alliance/dpa/dpa-tmn | Zacharie Scheurer

Among the measures is a one-off €300 boost to all employed taxpayers in Germany, as well as €200 for people on social welfare and €100 for those on unemployment benefit. 

People on housing benefit will receive a €270 heating cost allowance and €230 for students receiving state support (BAfög).

Meanwhile, families will receive a Kinderbonus amounting to €100 per child.

Other relief measures include an increase in the commuter allowance to 38 cents per kilometre (after the 21st kilometre), a €9 monthly travel ticket for use on public transport, and a fuel tax cut.

There are also a number of tax relief measures that were agreed upon earlier this year.

The government is also scrapping the Renewable Energy Act (EEG) levy on July 1st to save people money on their electricity bills, and there are changes to tax – such as the basic tax-free allowance increasing. 

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

The packages are aimed at providing financial relief to German residents in the cost of living crisis. In total, it amounts to around €4.46 billion of relief.

How much money are people actually receiving?

The German government has launched a number of resources that give examples of what people are entitled to and will get as financial relief, as well as individual calculators.

On the Finance Ministry’s site, the government shows six examples of what relief people will receive. They include a single person, a family with two children, a pensioner, and a self-employed person. 

Visitors visit stalls at the Central German Pottery Market in Wernigerode, Saxony Anhalt.

Visitors visit stalls at the Central German Pottery Market in Wernigerode, Saxony Anhalt. Several measures should provide financial relief to people in Germany this year. Photo: picture alliance/dpa | Matthias Bein

Here’s a look at two of the examples:

Single person

Arek, 32, is an employed mechanical engineer with a salary of €61,500, who lives in Cologne and commutes to work every day. 

The government says Arek will benefit from the increase in the basic tax-free amount and the employee lump sum, and will receive an extra €146 net.

The €300 one-off energy relief payment that Arek receives through his employer with his salary in September will result in him receiving €185 net (the payment is taxed) in his account. 

READ ALSO: Who gets Germany’s €300 energy relief payout – and when?

As a driver, Arek also benefits from the temporary reduction in energy taxes for fuel for three months: with his daily commute and occasional trips, he drives a total of around 700 kilometres per month. Therefore he consumes about 56 litres of petrol per month and, including VAT for three months, this comes to tax relief of about €59.07.

He also receives tax relief on his electricity costs due to the abolition of the EEG surcharge. For his electricity consumption of around 1,900 kilowatt hours per year, the EEG levy of 3.72 cents per kilowatt hour will no longer apply from July 1st. This results in tax relief of around €35.

Family with two children

Jens, 35, who is a roofer, and office clerk Maria, 33, both earn around €35,000 each. The couple lives in Bad Doberan with two children, and work in Wismar, about 44 kilometres away.

The family benefits from the basic tax-free allowance being increased by €363 retroactively to January 1st, 2022. This amounts to a net relief of €138 for them both. They also benefit from the increase in the long-distance commuter allowance – in 2022, they will be able to claim an increase of around €165 each for their commute to work, i.e. a total of €332. This will save them around €94 net. The tax relief on the basic tax-free allowance, plus the long-distance commuter allowance add up to around €232.

READ ALSO: Why Germany’s energy relief measures are no fix for adequate social security

The €600 (2 x €300) one-off payments that the couple receives in total through their employers with their salaries add up to a plus of about €430 (net) on the family account.

The family receives a Kinderbonus of €200 for the two children (€100 per child). That is paid out in July with child benefit. 

The reduction of the energy tax on fuel also provides relief: the joint journey to work, daily errands, and smaller trips by car add up to about 2,500 kilometres per month. The tax relief, including VAT, amounts to about €70 per month, i.e. €210 for the three summer months.

The family also receives tax relief on electricity because the EEG levy will be dropped. They consume around 4,100 kWh a year. From July 1st, the EEG surcharge will no longer apply, which corresponds to relief of around €76 for them. 

READ ALSO: Why people in Germany have longer for their tax return this year

How can I find out how much I will get?

The Finance Ministry has released two calculators which will help you get an idea of what you will get.

If you’re a taxpayer and want to see how much relief you’ll get with the €300 payout, check out the calculator here where you can input your salary before tax.

To calculate the energy tax on fuel, check out this one where you can input 

As with all of our tax and financial summaries, this is a guide only and should not be taken to constitute specific and tailored financial advice. For tax advice which is personalised to your situation, please contact an accountant or tax specialist. 

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MONEY

Germany reaches agreement on Bürgergeld – with a couple of catches

Members of Germany’s traffic light coalition government and the opposition Christian Democratic Union party have reached an agreement in the dispute over plans for a new citizens‘ income. There will be tougher sanctions against benefit recipients and fewer discretionary assets.

Germany reaches agreement on Bürgergeld - with a couple of catches

Last week, the German government’s plans to reform unemployment benefits with its new “Bürgergeld”, or citizens’ income, proposals were blocked in the Bundesrat.

The legislation was held up mostly by members of the Christian Democratic Union (CDU/CSU) which had been strongly opposed to the proposals for a six-month Vertrauenszeit (trust period) in which benefits claimants would not incur sanctions, as well as to the amount of assets recipients would be able to hold on to.

READ ALSO: EXPLAINED: Will Germany’s controversial Bürgergeld still come into force?

On Tuesday, politicians from the traffic light coalition parties and the CDU/CSU reached a compromise on the proposed reforms which means that some of the key measures will be scrapped.

No trust period

The CDU/CSU was able to push through its demand for more sanctions for recipients and the six-month trust period will now be scrapped completely.

Instead, it will be possible to enforce benefit sanctions from the first day of an unemployment benefits claim if recipients don’t apply for a job, or fail to turn up for appointments at the job centre, for example.

The CDU and CSU also demanded that unemployment benefits recipients be allowed to keep less of their own assets when they receive state benefits. The original plan had been for assets worth up to €60,000 to be protected for the first two years, but the compromise reached has knocked this down to €40,000 for one year – during which time benefits recipients will not have to use up their savings.

Following the announcement of the agreement, Green Party later Britta Haßelmann said “I regret it very much”. According to Haßelmann, the trust period was the core of the reform designed to stop people from having to take up “just any job”.

READ ALSO: Bürgergeld: What to know about Germany’s unemployment benefits shake-up

Other traffic light colleagues were more optimistic, however. Katja Mast from the SDP spoke of a “workable compromise in the spirit of the matter,” while FDP Parliamentary Secretary Johannes Vogel said that it had succeeded in “making a good law even better”.

CDU/CSU leader Friedrich Merz, meanwhile, sees the compromise as a great success for his party, though he also praised the willingness of the parties in the government to reach an agreement.

“The coalition was very quick and – to my surprise – very largely willing to make compromises here,” Merz said. 

What happens next?

Tomorrow, the Mediation Committee of the Bundestag and Bundesrat will meet to discuss the proposals. If the agreement is confirmed, the welfare reform could clear the final hurdle when it is voted on Bundesrat again at the end of the week. According to the federal government’s plans, if it’s approved, Bürgergeld will come into force in January and replace the current Hartz IV system. 

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