Financial relief for citizens

Financial relief for citizens

The Federal Government will reduce the renewable energy levy (surcharge under the Renewable Energies Act (Erneuerbare-Energien-Gesetz, EEG), which raises the price of electricity, in 2021 and 2022. This measure is a counterweight to the new CO2 pricing for greenhouse gas emissions in the heating and transport sectors. A portion of the proceeds from national emissions trading will be used for this. Housing benefit recipients will be assisted with heating costs in the context of CO2 pricing .

The renewable energy levy (surcharge under the Renewable Energies Act (Erneuerbare-Energien-Gesetz, EEG) will be reduced at the same time as national CO2 pricing for heating and transport emissions is introduced. The Federal Government has amended the “Erneuerbare-Energien-Verordnung” (renewable energies ordinance) accordingly. In 2021 and 2022, special grants will be used in addition to funds from national CO2 pricing within the framework of the “Konjunktur- und Zukunftsprogramm” (programme for economic stimulus and the future) in order to help households and companies facing additional costs due to the coronavirus pandemic. The renewable energy levy will be 6.5 ct/ kWh in 2021 and 6.0 ct/kWh in 2022.

The surcharge supports the expansion of renewable energies and is paid mainly through the price of electricity for private households, companies and public-sector establishments.

Higher housing benefit

In order to prevent social hardship resulting from increasing heating costs, the Federal Government and the federal states (Länder) will be increasing funds for housing benefits by ten percent from 2021. More than 600,000 households are to profit from this.

Cheaper rail travel

Rail customers have already been benefiting from financial relief since January 2020: the Federal Government has permanently reduced value-added tax on tickets for long distance travel from 19 to seven percent. By contrast, tax on air travel for flights within Europe has increased. By doing this, the Federal Government has reinforced incentives for using environmentally-friendly means of transport.

Higher commuting allowance for long distance commuters

From January 2021 onwards, professional commuters will receive a higher commuting allowance (Entfernungspauschale) of 35 cents from the 21st kilometre. Initially this is intended to provide financial relief mainly for commuters from rural areas without a comprehensive public transport network. If they are on a low income – for example, trainees – they can alternatively apply for the new mobility premium. Both relief measures are to continue until the end of 2026.