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Germany: Cabinet approves 300 euro energy bonus for pensioners

minimum wages in Germany 2022
Germany: Cabinet approves 300 euro energy bonus for pensioners

German news. 300 euro energy bonus for pensioners in Germany. The German cabinet has approved a one-time payment for pensioners to provide relief for the rising energy bills.

According to the Labour Minister Hubertus Heil, of the Social Democrats, the 300 euro payment is to be paid out by December 15th. For people in midi-jobs, the cabinet decided on a higher upper limit, which is a type of marginal employment in between a mini-job and full-time employment.

Why pensioners are receiving a special payment?

Since the start of the energy crisis, Germany has put together several major relief packages to assist people financially. One of the most high support measures was announced back in March this year, when a 300 euro taxable payment was paid out in employees’ September pay packets.

The government was slammed at the time as millions of pensioners were left out from the relief. It was only valid for taxpayers in tax brackets I to V.

According to the Federal Ministry of Social Affairs, a bonus energy payment will now be paid to all those who are entitled to a statutory old-age pension, pension for reduced earning capacity or surviving dependents’ pension, or to pension payments under the Civil Service or Soldiers’ Pensions Act from December 1st until December 15th. 

Pensioners living in Germany are entitled to the payment. They do not have to apply for it as the payment will be made automatically.

The ministry emphasised that the energy allowance is not counted towards income-related social benefits and is not subject to social security contributions. The government estimates the costs of the pay-out at about €6 billion.

Relief for low income earners

The cabinet decided to increase the upper earnings limit for people with midi-jobs from €1,600 to €2,000. This being part of the third relief package put together by the coalition government to support people in the energy crisis. 

“The sharp rise in prices for energy and food is a heavy burden on citizens,” said Heil, adding that the measures in the package will cushion some of these costs. 

“In this way, we are providing targeted relief for people with low incomes.”

The increase in the midi-job threshold alone would relieve the burden on employees subject to social security contributions with low wages by €1.3 billion, without having to forego social protection.

Unlike mini-jobs, midi-jobs are not exempt from social security contributions. They are however subjected to staggered reduced rates. Employees in midi-jobs do not have to pay full social security contributions until they reach the upper limit of €1,600 at present – and €2,000 in future.

Read also: Workers in Germany: who is entitled to a double energy bonus?
Germany: 300 euro bonus. Who qualifies for the relief payment?