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ENERGY

‘You’ll never walk alone’: Germany’s Scholz pledges more energy relief measures

German chancellor Olaf Scholz has promised to offer more financial aid for struggling households in a new package likely to be unveiled this September.

German Chancellor Olaf Scholz
Chancellor Olaf Scholz (SPD) announces new energy relief measures and plans to shore up Germany's energy supply in Berlin on Friday. Photo: picture alliance/dpa | Britta Pedersen

In a press conference held in Berlin on Friday, Scholz set out the government’s plans to tackle the ongoing energy crisis, including a new package of relief measures for consumers and the purchase of a 30 percent stake in the struggling energy giant Uniper.

The price of energy – and particularly natural gas – have been on the rise for several months, but the situation has worsened since Russia launched its full-scale invasion of Ukraine.

“Everything will get more expensive,” Scholz said, adding that the higher energy costs on the market “will soon become noticeable for all of us”.

To ease the burden on German households, the chancellor revealed that the government was currently mulling a brand new set of energy relief measures.

“The contours of this relief package have been discussed in the coalition and are in place,” he said.

So far, two key plans have been agreed on by the cabinet: a review of housing benefits that will include more money for energy costs, and reform of long-term unemployment benefits.

The latter involves a rebrand of the controversial Hartz IV system that will scrap most sanctions and increase the amount of money for recipients.

The new system, which will be called Bürgergeld (or ‘Citizens’ Allowance’), is due to come into force in January 2023. Proposals for the reforms were announced by Labour Minister Hubertus Heil (SPD) on Thursday.

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

In addition, the government is considering putting legal protections in place for tenants who find themselves in financial difficulties, Scholz said.

A similar moratorium for tenants was put in place during the Covid crisis, when many people saw their working hours reduced or lost their jobs.

In mid-September, the cabinet will meet to discuss supplementary measures that could form part of the third energy relief package this year. 

“There are many good, concrete proposals on the table,” the Chancellor explained.

Previous energy packages have included measures such as the €9 monthly travel ticket and a cut in tax on fuel.

‘You’ll never walk alone’ 

In the course of the press conference, Scholz repeatedly expressed a mantra well-known to fans of the English football club, Liverpool F.C. 

“You’ll never walk alone,” he said in English, quoting the club anthem. “No-one must face the future alone.”

However, from October 1st at the latest – and possibly even earlier – households in Germany may start to see a rise in their energy bills.

This is because the government is attempting to stop the struggling German energy sector from going under in the wake of the gas shortages and price shocks.

An electricity metre in a house. Photo: picture alliance/dpa | Uli Deck

In the first step towards bailing out the sector, the government plans to purchase a 30-percent stake in energy giant Uniper. It will then put legal mechanisms in place on either September 1st or October 1st that will allow the company to pass on up to 90 percent of its additional costs to consumers. 

Scholz warned that consumers could see their energy bills go up this autumn. A four-person household, for example, can expect an increase of €200-300 per year.

Economics Minister Robert Habeck (Greens) has previously warned that households could see price rises “in the four-digit range” this winter. 

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In addition, the government has already put a number of new measures in place to try and shore up Germany’s energy supply.

These include building new LNG terminals in the North Sea, setting targets for filling the gas storage facilities, keeping coal plants running and ensuring that coal transported by trains is prioritised on the railway tracks. 

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READER QUESTIONS

Reader question: Why haven’t I received my €300 payment yet in Germany?

Many working people in Germany will have received their energy relief payment by now. But if you haven’t got yours yet, there’s no need to worry, here are some reasons why that could be and what you can do.

Reader question: Why haven’t I received my €300 payment yet in Germany?

The €300 payment – known as the Energiepreispauschale or EPP – is one of the German coalition government’s relief measures intended to help people with rising energy costs. It goes out to everyone who lives and works in Germany, including those in part-time and temporary employment, trainees and students in paid internships as well as freelancers.

READ ALSO: What you need to know about Germany’s €300 energy relief payout

Those who have already received the payment as part of their September pay packet will have had an item on their pay slip marked as sonstiger Bezug (“other remuneration”) or “E” for Einmalbezug (“one-time payment“).

The EPP is subject to payroll tax, so only those who earn below the basic tax-free allowance (that means they don’t earn enough to pay any tax) will benefit from the full amount.

According to the Ministry of Finance, employees will receive on average €193 from the €300 allowance.

However, if the EPP didn‘t appear on your pay slip in September, here are a couple of reasons why that could be:

You have a mini-job

Mini-jobbers need to make clear to their employers that their mini-job is their main means of income, as often a mini-job is carried out alongside another job. If you haven’t received your €300 payment yet it’s best to discuss this with your employer and to confirm that it is your main job in writing.

A waiter carries a tray with used glasses and empty bottles. Photo: picture alliance/dpa | Jonas Walzberg

Your employer is not required to make the payment

There are some cases where the flat-rate energy allowance is not paid out by the employer at all. The Federal Ministry of Finance mentions the following exceptions, for example: if the employer is not required to file income tax returns, or the employee is employed on a short-term basis or is a temporary worker in agriculture and forestry.

In these cases, you have to file an income tax return for 2022 and claim the EPP there.

The payment may come later

The Ministry of Finance says that, if an employer misses the payment “for organisational or accounting reasons,” for example if you started your job in August and the payroll department missed you out, then the payment can be made later.

At the latest, however, it should come when the employer sends the Lohnsteuerbescheinigung (wage tax statement) – which is usually sent in December. In this case, too, it’s advisable to clarify with your employer or the payroll department why you haven’t received the payment yet. 

You work for a small company

Sometimes employers are not obliged to pay out the energy flat rate in September, but can still do so in October. This is the case if the employer submits its payroll tax returns to the tax office on a quarterly rather than monthly. Smaller employers, for example, who pay less than €5,000 in advance wage tax per year, only have to submit the advance wage tax payment once a quarter. This is not due until October 10th, so the employees concerned will not receive the €300 lump sum until October.

What other support will people get from the German government?

On Tuesday, Germany’s 16 state leaders are meeting with Chancellor Olaf Scholz to discuss which measures the €200 billion package announced last week should include.

READ ALSO: Germany to thrash out details of €200 billion energy support package

It’s expected that a Gaspreisdeckel – or a cap on the price of gas households would pay this winter – will soon come into force when the details are worked out, while plans for a cheap follow-up to the popular €9 ticket will also be presented later this month.

Benefit payment recipients will receive a one-off top-up to their existing benefit payments to pay for the higher cost of heating and pensioners will receive a €300 payment on December 1st. They do not have to apply for this, it’ll simply be added to the payments they receive from their pension insurance funds.

READ ALSO: KEY POINTS: Everything Germany is doing to help relieve rising energy costs

A €200 one-off payment is also planned for students, although each federal state may end up paying the amount slightly differently in a process that’s still being defined.

From next year, parents will see an increase in the amount of child benefit (Kindergeld) they receive, up to €237 per month, per child, up to and including the third child.

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