Further relief in the pipeline

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Federal Cabinet resolution Further relief in the pipeline

In response to the increase in energy, food and mobility costs, the Federal Government is introducing significant measures to relieve the burden on German citizens. The Federal Cabinet has introduced a lump sum for energy costs, a one-off child benefit bonus and a temporary fuel tax reduction.

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In addition to the extensive measures already implemented in the first relief package, the Federal Government has implemented a relief package for ordinary citizens in order to mitigate the effects of increasing energy prices. 

What new measures are in the pipeline?

The total relief volume is well over 30 billion euros. In several drafts, the Cabinet approved the implementation of the following measures:

  • Energy price lump sum: 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.
  • Child bonus: Starting in July 2022, a one-off bonus of 100 euros will be paid for each child eligible for child benefits. As in the past, this payment will be offset against the child tax allowance.
  • One-off payment for welfare recipients: The one-off payment for welfare recipients, which has already been approved, will be doubled to 200 euros.
  • 9-euro ticket: 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 between June and August 2022.
  • Fuel tax reduction: In addition, the fuel tax is to 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.

The resolutions passed by the Federal Cabinet are based on the agreement reached by the Coalition Committee on 23 March 2022 regarding the measures to be taken to deal with the high energy costs.

Which bills have been adopted?

The Federal Government has implemented the following regulations to implement the second citizen relief package:

The coalition factions intend to introduce the energy price lump sum and the family allowance (child bonus) as an amendment to the draft Tax Relief Act 2022. The coalition partners will introduce the doubling of the one-off payment for welfare recipients as an amendment to the Immediate Supplementary and One-off Payment Act draft.

The so-called 9 for 90 ticket is to be funded through a draft of the Seventh Act to amend the Regionalisation Act. The temporary reduction of the fuel tax is to be implemented via the Energy Tax Reduction Act draft.

Among other things, the creation of formulation aids will expedite the legislative process. Formulation aids are usually prepared for draft amendments to be discussed and voted on in the German Bundestag committees, but may also include drafts of bills from Bundestag members.

What will happen next?

The respective bills are currently going through the parliamentary legislative process. The Bundestag and Bundesrat will approve the necessary legislative changes on 19 and 20 May 2022 to facilitate the rapid adoption and implementation of the respective measures.

What are the provisions of the first relief package?

In view of rising energy prices, the Federal Government had already presented a comprehensive relief package: the commuting allowance, basic personal allowance and employee allowance will all be increased. A heating allowance, which is mainly intended for recipients of housing benefits and students receiving a grant under the Federal Training Assistance Act (BAföG), as well as the EEG levy for electricity consumers will be introduced as early as 1 July 2022.