Energy Allowance 2022

To cushion the financial impact of rapid energy growth on the economy, businesses, and citizens as much as possible, the federal government has pursued comprehensive relief measures and social support in the form of aid packages through immediate actions. When can financial relief be expected to take effect?

High energy prices – when is relief expected?

The German federal government has in the context of rising energy prices initiated relief measures for the citizens. These include extensive tax reliefs and other support measures. Affected companies, which are currently facing difficult challenges, should also be helped. The federal government plans to adopt an energy allowance by mid-2022.

Energy allowance – support package

In connection with the rise in energy prices, the following support measures are planned:

• Reduction of the energy tax,
• 300 euros energy allowance in 2022,
• discounted tickets for public transport,
• one-time payment of 100 euros per child,
• 200 euros for social assistance recipients.

Energy price development 2022 – reducing the energy tax

To relieve motorists, the energy tax on fuels will be reduced to the minimum level permissible under EU law for three months. As a result, the price of gasoline will be reduced by 30 cents per liter and diesel by 14 cents per liter. Costs are expected to decline from June 2022, making refueling cheaper around the holidays. The Federal Ministry of Finance, under the leadership of Christian Linder, has already submitted a draft law to reduce the energy tax.

Energy prices 2022 – 300 € energy allowance in 2022

For all employed persons who are subject to social security and income tax in tax classes one to five, there will be a one-time energy allowance of 300 €. It will be paid in addition to the salary that they receive by the end of 2022. It is to be granted additionally – irrespective of the applicable tax regulations. It is intended that the lump sum will be subject to income tax, so the net amount that beneficiaries receive will be correspondingly lower, depending on the tax rate. As for employees, payments will be made through the employer or payroll. Since they must be declared and taxed in this year’s (2022) tax return, every employee will have to file a tax return. Self-employed persons are to receive a one-time energy allowance in the form of a tax advance payment. According to the current plans of the government coalition, the energy allowance is not to be granted to retirees, pensioners, mini-jobbers, and the unemployed.

Rising energy prices – discounted tickets for public transport

In light of current energy prices, the traffic light coalition plans to introduce a ticket priced at nine euros for public transport throughout the federal territory. It is expected to be valid for up to ninety days. What else do we know about the 9-euro ticket?

• It is not to be limited to regional transport networks.
• It will be available to everyone, including those who have purchased a subscription (e.g., a standing ticket or a monthly/annual pass); they will receive a corresponding refund from the ticket provider.
• It is expected to be available from June 1, 2022.

Public transport is generally operated by the municipalities, so the federal states should receive funds for it.

Energy price development – 100 € one-time payment per child in the form of a subsidy

Assistance is also planned for families with children in connection with the rise in energy costs. They will receive an additional bonus of 100 euros per child. This one-time bonus is to be offset with child benefits. Compensation with social benefits such as unemployment benefit II or basic security is not planned. Despite plans to enact the relief package bill for current energy prices by the end of May 2022, parents will probably have to wait several months for the subsidy payout. This is because family benefits departments require several months’ lead time, meaning that child benefits can be paid out at the earliest in September 2022.

Energy price forecast – 200 € for recipients of social benefits

Recipients of social benefits or transfer payments will receive a one-time payment of 100 €. An additional 100 € per person must be added as part of the new measures for rising energy costs. It is not known when exactly this amount will be paid.

Relief package – quick and noticeable relief for citizens

The coalition committee agreed on March 23, 2022, on the above-described measures package to cope with rapidly rising energy costs. This involves a temporary reduction in amounts. Since the changes are new and it is easy to get lost in the calculations, we recommend using the easy-to-use German tax return software.

Relief package – quick and noticeable relief for citizens

The coalition committee agreed on March 23, 2022, on the above-described measures package to cope with rapidly rising energy costs. This involves a temporary reduction in amounts. Since the changes are new and it is easy to get lost in the calculations, we recommend using the easy-to-use German tax return software.