price shock for consumers
Who is entitled to the heating cost subsidy?
2/2/2022 7:34 am
When the heating bill arrives in the mailbox in summer, many consumers are in for a shock. Last year, the prices for heating oil, electricity and gas almost exploded – with the utility bill for 2021, many have to fear a hefty back payment. In order to absorb the burden, at least for low earners, the SPD, Greens and FDP want to pay them a one-time subsidy. Today the cabinet is supposed to approve the plans of Minister of Construction Klara Geywitz. Then it is the turn of the Bundestag.
Why should the one-time aid be paid?
According to the comparison portal Verivox, private households have never had to pay as much for heating, electricity and fuel as they do now. Energy has become more expensive by 35 percent within a year. Low-income households are significantly more affected by high heating costs than those of average and high earners. The one-time subsidy is intended to ensure that they can better cope with the expected additional payment in the summer.
Who should get the grant?
Above all, the recipients of housing benefit, i.e. households with low incomes, should benefit. The traffic light government also wants to support students with student loans, recipients of promotional student loans and trainees who receive vocational training grants. The requirement for recipients of housing benefit is that they received or are receiving the social benefit for at least one month during the heating phase between October 2021 and March 2022.
How many people is it and how much does it cost?
The first draft by the Ministry of Building speaks of around 710,000 households with housing benefits. The students and trainees were added later, so that almost 500,000 citizens should be added. The subsidy for recipients of housing benefit alone costs the state around 130 million euros.
How much will the subsidy be?
That depends on how many people you live with – because it is assumed that a small single apartment needs less heating than a family. Anyone who lives alone and receives housing benefit should receive a one-off payment of 135 euros, a two-person household 175 euros. For each additional person in the household there is an additional 35 euros. A flat rate of 115 euros per person is provided for students and trainees.
Is that enough for the expected additional payments?
Consumer advocates consider the subsidy far too low. For many households, the money will not be enough to compensate for the sharp rise in heating costs, according to the Federal Association of Consumers. He calls for a subsidy of at least 500 euros per household. According to a key issues paper by the ministry, the subsidy for housing benefit recipients was empirically derived in cooperation with the Cologne Institute for Economic Research. The heating costs of housing benefit households from 2020 have been extrapolated with the expected price increases.
When will the grant be paid out?
The money should be in the account at the latest when the additional payment is due in the summer, Minister Geywitz has promised. Specifically, the law should come into force on June 1st. Most households will automatically receive the subsidy with the housing allowance or vocational training assistance. The subsidy is not offset against other social benefits.
What about households that do not receive housing benefit?
Even those who do not receive housing benefit can feel the high energy prices painfully. Finance Minister Christian Lindner and Economics Minister Robert Habeck have therefore announced that the green electricity surcharge for consumers could be eliminated earlier than planned. As early as the middle of the year, the EEG surcharge could be removed from the electricity bill – according to Lindner, a “billion-dollar relief for families, pensioners, recipients of student loans or basic security and medium-sized businesses and trades”. However, the surcharge should then be financed from the federal budget, i.e. with tax money.