Consumers currently have to pay significantly more for energy and food in particular than they did months ago.
(Photo: dapd)
Berlin The federal government’s relief packages are significantly cushioning the sharp rise in prices in employee households. For a family with two working adults, two children and a monthly net household income of 2000 to 2600 euros, around 64 percent of the foreseeable additional burdens that will arise this year from higher energy and food prices will be compensated. This is shown by a study by the IMK research institute of the trade union-affiliated Hans Böckler Foundation.
Overall, the government’s measures provided “extensive and largely socially balanced relief,” write IMK Director Sebastian Dullien and his colleagues Katja Rietzler and Silke Tober, who have examined the effect on different household types. However, they see a “social imbalance” among the unemployed and retirees.
The sharp rise in prices is a significant burden for consumers. In May, the inflation rate rose to 7.9 percent, its highest level since the oil crisis in winter 1973/74. In June, inflation eased slightly again to 7.6 percent.
The main reason for the high rates is the sharp increase in energy and food prices as a result of the war in Ukraine. In their calculations for the current year, the IMK researchers are assuming an average inflation rate of 6.9 percent.
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In order to mitigate the effects on consumers, the governing coalition decided on two relief packages with a total volume of 30 billion euros in the first few months of this year. They contain, among other things, higher tax allowances, an energy price flat rate for employed persons, the early abolition of the EEG levy, a child bonus, flat rates for recipients of social benefits and a three-month “fuel discount”. Most of the measures will only take effect in the summer.
While the family with a below-average monthly income of 2000 to 2600 euros is relieved by around 64 percent, the dampening effect is less for higher earners. In a comparable four-person household with an average monthly income of 3,600 to 5,000 euros, only 54 percent of the foreseeable price increases will be offset.
Most of the relief comes from taxes
The relief for families in which only one parent is employed is significantly lower. For a family of four with a household income of between 2,600 and 3,600 euros, it is 44 percent and thus lower than for a childless couple where both partners work and who have a net household income of 3,600 to 5,000 euros. Here the expected price burden is compensated by 51 percent. For a single parent with two children and a monthly income of 2000 to 2600 euros, the figure is 48 percent.
People who are dependent on basic state security will receive a bonus of 200 euros this year. The heating costs of these households are paid by the state anyway. According to calculations by the IMK researchers, around 90 percent of the foreseeable price burden will be compensated for a single person or a couple with two children who receive Hartz IV benefits.
According to the study, most of the relief is due to the changes in income tax law, the flat-rate energy price and the child bonus. For example, the retrospective increases in the basic tax-free allowance and the lump sum for employees from January bring a relief of 248 euros to a couple household with two employees, two children and an annual income of 60,000 euros. The energy price flat rate and the child bonus add another 636 euros.
Read more about inflation and possible counter-strategies here:
The traffic light coalition is currently still struggling to find out how the burden on citizens can be relieved. Finance Minister Christian Lindner (FDP), who wants to comply with the debt brake again from 2023, first wants to wait for the effects of the packages that have already been decided before deciding on new measures.
According to the IMK researchers, the government should make additional taxes primarily for non-employed people with low incomes, for example pensioners who are only slightly above the social benefit limit. Because the current relief packages only absorb about ten percent of the price increases that retirees living alone with a net income of less than 900 euros can expect.
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