Changes to the right of residence, help for clinics, a new daycare quality law and a whole range of new rules in tax law: the traffic light coalition wants to bring numerous projects through the Bundestag this Friday. An overview of the legislative projects that have already been passed in the morning and those that are still to be voted on during the day.
More opportunities for immigrants
Opportunity Right of Residence: The traffic light coalition wants to reform migration policy with several legislative projects – also to bring missing skilled workers from abroad to Germany. The bundle of measures also includes the so-called right of residence, which the Bundestag passed with a majority of 371 votes in a roll-call vote. According to the federal government’s plans, the law should offer prospects to well-integrated foreigners who have been living in Germany for several years without a secure status. Anyone who has lived in the country for five years as of October 31, 2022 and has not committed a crime should be given 18 months to meet the requirements for long-term residence – this includes knowledge of German and securing their own livelihood.
Faster asylum procedures: The new right of residence is just one component of the traffic light coalition’s plan to reform German migration policy. A second law passed by the Bundestag is intended to ensure faster and more efficient asylum procedures. It sets the maximum duration for an asylum procedure at six months, but allows an extension to up to 18 months if there are appropriate reasons. Changes in asylum procedure law should result in faster court decisions.
immigration of skilled workers: The Federal Cabinet had already decided on key points on Wednesday. In order to attract more workers to Germany, the federal government also wants to simplify the rules for entry and the recognition of professional qualifications. Selection criteria should be professional experience or a connection to Germany.
citizenship: Another construction site in migration policy is citizenship, which is not the subject of today’s decisions. According to their coalition agreement, the traffic light parties want to create a “modern nationality law” that provides for the possibility of naturalization “usually after five years” – currently there are eight. “In the case of special integration achievements” – such as outstanding achievements in school and work or particularly good language skills – it could even be just three years. It is also planned that children of foreign parents born in Germany will automatically become Germans if one parent has already had “his lawful habitual residence” in Germany for five years. In addition, anyone who wants to become a German should no longer have to give up their old citizenship.
Tax relief and excess profit tax for energy companies
With the Annual Tax Act 2022, the Bundestag wants to pass a whole smorgasbord of tax changes in the afternoon. The package contains a number of tax advantages, for example in housing construction, for solar power systems and for employees. But it also includes changes that amount to tax increases – such as a first-time excess profits tax for some energy companies and the Valuation Act that could make real estate transfers more expensive. In total, the federal, state and local governments are expected to lose around 4.5 billion euros in tax revenue over the course of a year. The most important tax changes:
- excess profit tax: Companies in the oil, gas, coal and refining industries are to make an energy crisis contribution limited to the 2022 and 2023 financial years. This implements an EU requirement. Profits that exceed the average profit by 20 percent compared to previous years are taxed at 33 percent. The revenue, estimated at one to three billion euros, is intended to help finance the electricity price brake for consumers.
- Relief for employees and capital income: The flat rate for the home office for the tax return and the home office flat rate will be combined in a daily flat rate of six euros from 2023 (previously five). It can be claimed for 210 days. The employee lump sum for income-related expenses will be increased to 1230 euros instead of the planned 1200 euros. The relief amount for single parents increases from 4008 euros to 4260 euros. The saver’s lump sum for interest and capital income will be raised from 801 euros to 1000 euros.
- solar power: Income from small solar power systems is tax-free retrospectively from the beginning of 2022. From 2023 onwards, sales tax of 19 percent will no longer apply to the purchase and installation of photovoltaic systems with an output of up to 30 kilowatts and electricity storage. This is intended to promote the solar turnaround on private homes.
- Housing: The special depreciation will be continued in the construction of rental apartments, but it will be linked to climate-friendly construction. Five percent of the production costs can be deducted from tax for four years if the very high standard of the energy-efficient house 40 is maintained and the construction costs do not exceed 4800 euros per square meter. In addition, straight-line depreciation for residential buildings will be increased from two to three percent from the beginning of 2023.
- Retirement provision: The full deduction of special expenses for old-age provision will apply from 2023. So far, 96 percent was planned for 2023 and 98 percent for 2024. This is to avoid double taxation.
- Taxation of Energy Relief: For private individuals with higher incomes, part of the relief from the emergency aid in December and the gas and heat price brake will be collected again. This should only affect taxpayers who also pay the solidarity surcharge. For them, the taxable income increases by the relief. This is seen as social compensation, since higher incomes are less dependent on the relief. Revenues of around 850 million euros are expected. A tax liability for the energy price flat rate for pensioners is also planned.
- Valuation law: The transfer of real estate assets – for example through gifts and inheritances – could become more expensive. Changes in the Valuation Act can result in the tax value having to be set higher from the beginning of 2023 when determining the value of a property. The goal is a market value closer assessment. As a result, inheritance, gift and real estate transfer taxes could be higher.
Traffic light coalition wants to relieve nursing staff
High workload and too little staff – the professional association for nursing professions reports on a dramatic situation in its own industry. The Bundestag will decide on reforms for clinics in the afternoon. With a draft law, the federal government wants to achieve improvements in the sector and, above all, relieve the burden on nursing staff in hospitals. To this end, the amendment provides for a new instrument for assessing personnel, which is to be introduced in three stages.
Recently, the problem of the lack of staff had also become clear from the situation in children’s hospitals. The children’s hospitals in Germany are currently having great difficulties in caring for all seriously ill small patients. According to a survey by the German Interdisciplinary Association for Intensive Care and Emergency Medicine (DIVI), there are currently hardly any free beds in German children’s hospitals. The law is intended to counteract bottlenecks. From 2025 onwards, the personnel assessment should then be binding and sanctioned.
The draft law also contains some new regulations for the financial strengthening of paediatrics and obstetrics. For the years 2023 and 2024, 108 million euros are to be made available from the health fund to finance obstetrics. In addition, the personnel costs for midwives in hospitals are to be fully taken into account in the care budget from 2025.
Kita Quality Act is intended to counteract the shortage of skilled workers in kindergartens
The vote on a daycare quality law is due in parliament this afternoon. With it, the federal government wants to further develop the previous so-called Good Day Care Act and place a stronger focus on the quality of child day care. The federal government is making almost four billion euros available to the federal states for this purpose over the next two years. In addition, the Federal Employment Agency is to finance three instead of two years of retraining in the future – with a total of five years of training in the educator profession.
Federal Family Minister Lisa Paus (Greens) expects that the shortage of skilled workers in kindergartens and day-care centers can be alleviated by the new law. Paus said she was optimistic about recruiting additional staff for the care facilities Deutschlandfunk. The Bertelsmann Foundation published a forecast in October, according to which there would be a shortage of around 384,000 daycare places in Germany in the coming year. In the Federal Council, there had previously been major opposition to parts of the law. The state chamber must agree to the project – otherwise it cannot come into force.