How the federal government supports low-wage earners

Federal Minister of Construction Clara Geywitz is planning a subsidy for heating costs

One of the first legislative proposals from the new ministry is available.

(Photo: dpa)

Berlin Because of the sharp rise in energy prices, recipients of housing benefit should receive a one-off heating cost allowance of at least 135 euros. This is based on a draft law of the new Federal Ministry of Construction, which is available to the Handelsblatt. It was given to the departmental vote on Monday and at the same time to the federal states and associations for a hearing.

The planned support is staggered according to household size for people who received or are receiving housing benefit in the months of October 2021 to March 2022. Those who live alone should receive 135 euros. If there are two people in one household, it is 175 euros. For each additional roommate, 35 euros are provided. In total, the grant is expected to cost the federal government 130 million euros. According to the draft law, around 710,000 households will benefit.

In the draft it says: “With a one-off heating cost subsidy for households entitled to housing benefit, lower-income households are given targeted support.” The cabinet should decide on the subsidy as early as January 26th. The law is expected to come into force on June 1st.

Germany’s top consumer advocate, Klaus Müller, complained that the subsidy was “clearly too low”. For many households, the sums were not enough to offset the sharp rise in heating costs. “It is also unclear how cold the winter will be, and accordingly how high the bills will be,” said the head of the Federal Consumer Association (VZBV) the Handelsblatt.

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The amount of the heating subsidy must “completely” cover the additional heating costs of these households. Müller is convinced that some of the households affected will probably receive high bills during the heating season. “The VZBV demands unbureaucratic emergency aid for these households.”

First draft law by the traffic light government

A flat-rate heating cost that is taken into account in the housing benefit has been in place since the beginning of 2021. A flat rate of EUR 14.40 is charged for one household member and EUR 18.60 for two household members.

Due to the disproportionately high increase in energy costs in the course of 2021 compared to previous years, it is to be expected that high additional payments will coincide with monthly higher payments in the course of the ancillary cost bills, according to the newly created Federal Building Ministry, which with the submitted paper on heating cost subsidies, the first draft law of the Traffic light in the departmental vote. The ministry is thus implementing a requirement from the coalition agreement.

“The one-time heating cost subsidy in the housing benefit is intended to cushion the social effects of the sharp rise in energy costs in households that are barely able to cope with the associated financial burdens,” it says.

Daniel Föst, building and housing policy spokesman for the FDP parliamentary group, told the Handelsblatt. “It is important and right that we give people one-time support with the skyrocketing heating costs.” The rapid rise in prices must not turn into a poverty trap. In the medium term, according to the Renewable Energy Sources Act (EEG), the levy on the electricity price would have to be eliminated, said Föst.

More: One-time subsidy for heating costs – government plans to take relief for low-wage earners at the end of January

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