Relief in the energy crisis: How the gas one-off payment works

As a bridge to the planned gas price brake, gas and district heating customers will be reimbursed for their down payment for December. tagesschau.de explains how the emergency aid for consumers works.

What is the so-called December aid?

In order to support citizens with the exploding energy costs caused by the Ukraine war, the federal government has agreed on a gas price brake. However, since this will only take effect from March 1st – or at most retrospectively to February 1st – there should now be a one-off payment. This two-stage solution was proposed by the commission of experts in October. As has now been decided by the Bundestag and Bundesrat, the state will take over the down payments for gas and district heating due in December as part of the Natural Gas Emergency Aid Act.

Households and smaller companies with an annual consumption of up to 1.5 million kilowatt hours (kWh) that do not use natural gas for the commercial operation of electricity or heat generation plants receive the one-off cushioning of the high gas prices. There are also facilities in the nursing and education sector as well as in medical care. The costs for the federal government are estimated at nine billion euros.

How is the gas one-off payment calculated and how much is it?

Consumers are reimbursed for their gas costs in the amount of a monthly payment. According to the Federal Ministry of Economics, the relief is calculated on the basis of one-twelfth of the annual consumption that the gas supplier had forecast for the extraction point in September. This value is multiplied by the December price per kWh and supplemented by one twelfth of the basic price. Since the emergency aid is not dependent on current consumption, there should continue to be an incentive to save.

According to the comparison portal Check24, all gas customers in Germany are expected to receive around five billion euros together. A model family with a consumption of 20,000 kWh currently pays an average of 18.6 cents per kWh and 3726 euros per year for gas. By taking over the December discount, you save almost 311 euros. For a single with a consumption of 5000 kWh, the bottom line is a saving of 86 euros.

For comparison: With the gas price brake, with which a price of 12 cents per kWh should apply from March for 80 percent of the previous year’s consumption, a family will be relieved by 1056 euros and a single person by 264 euros per year, according to Check24. Calculated for one month, that’s 88 or 22 euros.

What do homeowners have to do?

In principle, the forecast advance payment should be credited to the respective gas supplier. If the latter has a direct debit authorization, he or she can simply stop the debit from the customer’s account.

However, if the consumer has set up a standing order, he must take action himself and change it for December. Otherwise, the excess amount transferred will be offset against the next annual statement. If the gas is paid for every month by bank transfer, this can be dispensed with in the coming month.

In a second step, the provider finally determines the exact amount of the relief via the annual statement. After reconciliation, both additional payments and additional refunds are possible.

Are there special features for tenants?

Unlike homeowners and companies, tenants and members of so-called homeowners’ associations in many cases do not have a direct contract with the supplier, but pay for the gas through their ancillary costs. Therefore, the measure runs here via the private landlord or the real estate company. The residents therefore only receive the emergency aid with their next heating bill, for which the landlords have one year.

In other words, in the worst case, tenants must be on their relief by the end of 2023. This was recently criticized by the German Tenants’ Association. The emergency aid is extremely important, said President Lukas Siebenkotten, the dpa news agency. “But tenants benefit from this far too late and are disadvantaged by the law.” In addition, only a fraction of how high their individual relief contribution from the federal government actually turns out to be.

Many landlords have not yet adjusted the monthly advance payment to the increased prices, the Federal Ministry of Economics justifies the procedure. Accordingly, the tenants ultimately benefit at exactly the point in time when they have to bear the increase in the gas price from 2022 through additional payments. In addition, landlords must provide information about the estimated credit as early as December.

Tenants who have already been making increased advance payments for operating costs since spring 2022 are to be released from the obligation to pay the increased amount in December. In the case of new contracts, for example, it can be assumed that discounts adjusted to the current energy costs have already been agreed.

How does the one-off payment for district heating customers work?

The advance payment for December is also reimbursed for district heating – which is also often generated from natural gas. In addition to private consumers and companies with an annual consumption of a maximum of 1.5 million kWh, this also includes customers who pass on the heat obtained to their tenants in connection with the rental of living space. There is also help for state, state-recognized or non-profit institutions in the fields of education, science and research.

The heat supply companies are obliged to provide financial compensation and must do so by December 31, 2022. According to the Federal Ministry of Economics, it is up to you whether you waive the customer’s advance or down payment or pay him a credit note instead. The amount is based on the advance payment made in September due to the different contractual structures compared to pipeline-bound natural gas. This flat rate is increased by an additional 20 percent to reflect the price increases between September and December.

Is the relief taxable?

Not for most people. Only those who earn more than 75,000 euros per year should pay tax on the one-off state payment. This follows the recommendation of the gas price commission and creates a socially just balance, stressed SPD deputy faction leader Achim Post last week to the Reuters news agency. It is about “particularly supporting small and medium-sized incomes – because they are the ones who feel the rising energy prices most clearly in their own wallets,” says Post.

However, the taxation is not regulated by law, but only announced, writes the Federal Ministry of Economics. However, one thing is certain: for taxpayers who pay the supplementary tax on income tax (solidarity surcharge), the deduction will be taxable with the settlement of the suppliers and administrators for the assessment period 2023 at the earliest. According to the information, further details will be regulated as part of the legislative process on the gas and heat price brake.

How do providers get the money back?

In order to finance the relief for the month of December 2022, the energy suppliers are entitled to a refund or an advance payment from the federal government. According to the Federal Ministry of Economics, around 1,500 natural gas suppliers and heat supply companies are affected. You have to apply for the payment of the claim after a test procedure via your house bank at the state development bank KfW.