What the coalition’s energy relief package envisages – money

– Since the start of the Ukraine war, many prices have shot up. The federal government wants to give citizens a helping hand, especially when traveling by car or train. But whether that is enough is debatable.

Due to the sharp rise in energy prices, the federal cabinet has launched a billion-euro relief package for citizens. Train and car drivers will benefit, as will almost all workers.

However, it is disputed whether the aid can even come close to cushioning the exploding prices. That will ultimately also depend on the course of the war – and a possible stop in the supply of Russian gas.

The heads of the coalition of SPD, Greens and FDP agreed on the package at the end of March when it became clear what effects the Russian war in Ukraine would have on prices at gas stations, for heating and also in supermarkets in Germany. As early as February, among other things, the abolition of the EEG levy on the electricity bill from July was decided – the Bundestag is to make a final decision on this Thursday (April 28).

What’s in the second relief package:

Lower energy taxes should make fuel cheaper

After the Russian attack on Ukraine, fuel prices in this country skyrocketed – in some cases by double-digit cents per liter per day. According to the ADAC, Super E10 peaked on March 14 with a national daily average of EUR 2.203 – that’s a good 45 cents more than the day before the outbreak of war. Diesel was the most expensive on March 10 at 2.321 euros per liter – an increase of almost 66 cents compared to the pre-war level.

The traffic light coalition therefore decided to reduce energy taxes on fuel for three months – from the beginning of June to the end of August – as much as EU guidelines allow. It is hoped that the companies will pass this on to the customers. According to the Ministry of Finance, the tax rate for petrol is reduced by 29.55 cents per liter and for diesel by 14.04 cents.

The reduction is controversial, because in the meantime fuel prices have fallen noticeably again. According to ADAC figures, E10 cost 1.954 euros per liter on Tuesday, diesel 2.019 euros.

9-euro monthly ticket for local and regional transport

To compensate for the subsidization of fossil energies – for example through the cheaper fuel – the federal government also wants to make local public transport (ÖPNV) cheaper. Not only car drivers, but also train drivers should benefit. From June to the end of August, passengers should be able to travel nationwide for 9 euros per month in local and regional transport – and thus much cheaper than with the usual monthly tickets.

The cabinet decided on changes to the regionalization law – this is the basis for the money that the federal government makes available to the states each year to finance local rail passenger transport.

The federal government now wants to give the federal states an extra 2.5 billion euros for the 9-euro monthly ticket. However, that is not enough for the federal states, they want significantly more money to be able to compensate for the sharp rise in energy, construction and personnel costs in public transport. You could therefore let the project fail in the Federal Council for the time being.

300 euros energy price flat rate

Employed persons who are subject to income tax are to receive a one-time lump sum of 300 euros gross to compensate for the high energy costs. The money is paid out by the employer as a salary subsidy, and the tax advance payment is reduced for the self-employed. The 300 euros are then subject to income tax. As a result, citizens with a high tax rate get less out of it in the end, and those who remain below the basic tax-free allowance benefit from the full amount.

It is controversial that pensioners should go away empty-handed with the payment method. Social associations criticize that senior citizens with small pensions are dependent on the money. The traffic light parties, on the other hand, are citing the upcoming pension increase. It is also controversial whether the 300 euros will be enough to compensate for the additional costs caused by the increased prices, for example for heating.

Bonus for families with children and recipients of social benefits

Families should be particularly relieved – that’s why the child benefit is increased once by 100 euros per child. The bonus should come to the account in the summer and be paid out automatically by the family fund, so it usually does not have to be applied for.

Anyone who receives social benefits should also receive a further one-off payment of 100 euros in addition to the 100 euros subsidy that has already been decided.

costs to the state

For the relief package, Finance Minister Christian Lindner (FDP) has to update the budget plans that have already been submitted to the Bundestag. In a supplementary budget, he is planning additional debts of almost 40 billion euros – but this also includes economic aid, the extension of free corona tests and other measures.

According to the draft, the flat-rate energy price alone will cost the state around 10.4 billion euros. Although the payments add up to 13.8 billion euros, the state also takes 3.4 billion more in wage and income tax and solidarity surcharge. Costs of almost 9 billion euros are budgeted for the child bonus this year. These will also lead to slightly more tax revenue in the years to come. According to the Ministry of Finance, the federal government will lose around 3.15 billion euros in tax revenue due to the temporary tax cut on fuel.

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