The government is putting together an energy package for pensioners and workers with “Midijob” contracts, for which more than 65 billion euros are going to be allocated to face the rising cost of energy. The initiative revolves around two main measures: on one side, the provision of the sum of 300 euros; on the other, a shift in the definition of what regulates “Midijob” contracts.
Energy package (Energiepreispauschale EPP)
The sum supplied amounts to 300 euros and will be fully paid out by 15 December 2022 and it is conceived as a one-time payment.
Who is entitled to it?
The first requirement is to be resident in Germany. People involved are those who, on 1 December 2022, prove to be entitled to one of the following pensions:
- old-age pension,
- invalidity pension,
- the so-called “Hinterbliebenerente” (that is the pension provided to widows and orphans).
In addition, former civil servants and agricultural workers also have the right to package.
Although the sum is not subject to social security contributions, it is subject to taxation. The lower the pension, the more effective the relief will be. The pension insurance is liable for the allocation of the money; therefore, the payment will follow automatically, as the tax assistance institute (Lohnsteuerhilfe) informed. That is to say that there is no need to apply for it: the sum will be issued directly to the account on which you normally receive your pension.
If you are resident in Germany but receive your salary in another EU country, then you must apply to Deutsche Rentenversicherung Knappschaft-Bahn-See, 44781 Bochum. You need to apply for the energy package even in case you are entitled to it, but for some reason have not received it. If you have the right to more than one pension (e.g. old age and widow’s pensions), the sum of 300 euros will be delivered just once. The Ministry of Labour and Social Policy also informs that those who obtain their first pension at the end of December will only receive the payment at the beginning of the new year.
This measure is also aimed at students, who will be provided with a sum of EUR 200. However, it is currently unclear when they will be supplied with this contribution.
There is also an increase in the upper limit to fall under the definition of “Midijob”, whereby the band (Übergangsbereich) that previously included a gross salary between 520 and 1600 is now raised to 2000.
The initiative will result in a significant tax relief for low-income workers who pay social security contributions with a total saving of EUR 1.3 billion to be expected. The contributions due will thus be lower without sacrificing the quality of services.