In order to take the sting out of rising energy prices, the Federal Government has implemented a package of tax relief. This includes tax improvements such as raising the commuters’ allowance, payments to low-income families and heating cost subsidies. Concerning energy prices, the abolition of the Renewable Energy Sources Act levy is being brought forward. An initial overview:
What support is available for employees?
The employees’ allowance for business-related expenses is to be raised by 200 euros to 1,200 euros. Those in employment can therefore claim for work-related costs up to a value of 1,200 euros without having to submit supporting documents.
The basic personal allowance on income tax is to be raised by 363 euros to 10,347 euros. This aims to partly compensate for fiscal drag in line with the actual 2021 inflation rate and the estimated 2022 inflation rate.
People in gainful employment, the self-employed, and tradespeople will receive a one-time energy price lump sum of 300 euros, which will be paid via the respective employer's payroll. The self-employed will receive an advance payment via a one-off reduction of their advance income tax payment.
What is the Federal Government doing for commuters?
The commuters’ allowance for long-distance commuters is to be raised from 35 to 38 cents from the 21st kilometre. This is aimed at mitigating increased costs of travelling for work due in part to carbon dioxide pricing. The new rules apply from 2022 to 2026 to all forms of transport. You can find more information here and on the
Will petrol and diesel become more affordable?
Fuel tax will be lowered to the European minimum between June and August. Petrol tax will be reduced by 30 cents per litre and diesel tax by 14 cents per litre. This reduction is to be passed on to consumers.
Are there any public transport relief measures?
Buses and trains are an environmentally friendly alternative to cars, which is why the Federal Government will be offering a nationwide public transport ticket for just nine euros a month for all citizens. This measure will be implemented nationwide between June and August 2022.
Who will get a one-off payment?
Adults receiving social support payments are to receive a one-off payment of 200 euros. Specifically, this refers to all who receive payments under Social Security Codes (SGB) II or XII, those who draw payments under the Asylum Seekers Payments Law or receive supplementary livelihood support under the Federal War Victims Relief Act.
In addition, a one-off payment of 100 euros will be distributed to all recipients of unemployment benefits. The prerequisite is that the person must receive unemployment benefits in July 2022.
Will there be any additional support for children?
In order to mitigate particular hardship for families, a one-off bonus of 100 euros will be paid for each child eligible for child benefits, starting in July 2022. As in the past, this payment will be offset against the child tax allowance. These payments will be made from July 2022.
In addition, children and youths affected by poverty will receive an immediate monthly supplement of 20 euros in the future, starting in July 2022. This also applies to young adults who live in the same household as their parents who are eligible for benefits.
Their eligibility is conditional on the child being eligible for benefits under SGB II, SGB XII, the Asylum Seekers Payments Law or supplementary livelihood support under Federal War Victims Relief Act. Children whose parents receive supplementary child allowance are also eligible.
Who is to receive the heating cost subsidy and how much will it be worth?
The heating cost subsidy for households on housing benefits is structured according to the size of the household:
- for one individual 270 euros (instead of 135 euros as per the initial draft)
- up to two individuals 350 euros (instead of 175 euros)
- for each additional individual 70 euros (instead of 35 euros)
For recipients of support under the Federal Training Assistance Act, those receiving Upgrading Training Assistance Act additional payments, and trainees with disability subsidies or education benefits, the heating cost subsidy is worth 230 euros (instead of 115 euros).
Do you have to apply for the heating cost subsidy and when will it be paid?
All those entitled will receive the heating cost subsidy ex officio - i.e. without a separate application. It will be transferred to their accounts in the summer when yearly invoices for heating and additional costs are usually issued.
The heating cost subsidy will benefit 2.1 million people, including 1.6 million recipients of housing benefits in 710,000 households. Some 370,000 recipients of Federal Training Assistance Act funds will also receive the subsidy, as will around 65,000 trainees on disability subsidies or education benefits who do not live with their parents. Around 75,000 people receiving support under the Upgrading Training Assistance Act will also benefit from the subsidy.
When will the EEG levy be abolished for electricity customers?
The Renewable Energy Sources Act levy (EEG levy) is currently set at 3.72 cent per kilowatt/hour. It will be abolished from 1 July 2022. The Federal Government has brought forward the planned abolition of the Renewable Energy Sources Act levy by six months from 2023. From 2023 the Renewable Energy Sources Act amendment will permanently abolish the Renewable Energy Sources Act levy. In future it is to be funded from the Federal budget.