Are employees in part-time employment (Minijob) also entitled to the energy allowance?
The sudden and drastic increase in energy costs is causing significant additional burdens, which the government now aims to partially offset for employees.
In the "Tax Relief Act 2022" of 23 May 2022, it was stipulated that from 1 September 2022, all employees subject to income tax in tax classes I - V will receive a one-off energy price allowance (energy allowance, EPP) of 300 Euro as a supplement to their salary, paid through their employer's payroll. Self-employed individuals will receive an advance through a one-off reduction in their income tax prepayment. If this is not the case, the energy price allowance will be determined with the 2022 income tax assessment (§§ 112 to 122 EStG-new).
- Eligible are individuals with unlimited tax liability residing in Germany who earn income from employment, agriculture and forestry, business, or self-employment in 2022.
- It is legally stipulated that the entitlement to the EPP arises on 1 September 2022. However, 1 September is not a cut-off date for the eligibility requirements. Anyone who met the eligibility requirements at any time in 2022 is entitled to the payment.
- In any case where an income tax return is submitted for 2022, the tax office will check whether there is an entitlement to the EPP. Employees who have not yet received their EPP through their employer will receive it based on their details when submitting an income tax return for 2022. No special application is required. The tax assessment will then include both the income tax and the EPP - and unfortunately, it will be taxed again.
Those in part-time employment (minijobbers) and short-term employment (temporary staff, seasonal workers) are also entitled to the energy price allowance in accordance with § 8 para. 1 no. 1 and § 8a SGB IV. However, the employer will only pay the energy price allowance if they submit a payroll tax return to the tax office and the employee confirms in writing that it is their first employment relationship. This is to prevent a minijobber from receiving the allowance from multiple employers.
Tip: A template for the declaration can be found on the Minijob Centre website.
If the employer does not submit a payroll tax return (e.g. private household), the allowance will be determined in the 2022 income tax assessment. No special application is required for this. However, the submission of an income tax return is, of course, necessary. The energy price allowance can also be received by individuals who receive exclusively tax-free wages: Beneficiaries include voluntary trainers, coaches, supervisors, conductors, etc., whose remuneration is tax-free up to 3.000 Euro according to § 3 no. 26 EStG, as well as volunteers who receive an expense allowance of 840 Euro according to § 3 no. 26a EStG. The EPP is exempt from social security contributions but is taxable.
- For employees, the energy price allowance is taxable as wages (other remuneration) according to § 19 para. 1 no. 1 EStG. If paid by the employer, it is subject to payroll tax deduction as "other remuneration". If the EPP was not paid through the employer, the tax office will increase the gross wages reported by the employer with the payroll tax certificate by 300 Euro in the 2022 tax assessment.
- For eligible individuals who did not receive income from employment in 2022, the energy price allowance is always to be treated as "other income" (§ 22 no. 3 EStG). The exemption limit of 256 Euro according to § 22 no. 3 sentence 2 EStG does not apply to the EPP.
For employees who receive exclusively flat-rate taxed wages from part-time or short-term employment or temporary work in agriculture and forestry and have no other eligible income throughout 2022, the EPP is not part of taxable income (§ 119 EStG). For minijobbers, the EPP is not counted towards the 450 Euro limit (from 1 October 2022: 520 Euro limit) as it is not subject to social security contributions.
(2022): Are employees in part-time employment (Minijob) also entitled to the energy allowance?
How do employees receive the energy price allowance?
The energy price allowance (EPP) is paid through the employer's payroll.
- Eligible are individuals residing in Germany who, in 2022, earn income from employment (§ 19 para. 1 no. 1 EStG) or self-employment (agriculture and forestry, business, freelance work) - i.e., employees and self-employed persons.
- Also eligible are volunteers as defined in § 2 of the Federal Volunteer Service Act (BFDG) and volunteers as defined in § 2 of the Youth Voluntary Service Act (JFDG): This includes, for example, the Federal Volunteer Service, voluntary social or ecological year, European Voluntary Service, International Youth Voluntary Service.
- Persons in marginal or short-term employment (mini-jobbers and temporary staff, seasonal workers) are also eligible.
- Not eligible are taxpayers without a residence or habitual abode in Germany, particularly cross-border commuters with limited tax liability. This is because people living abroad are either subject to lower energy prices than in Germany or benefit from comparable government measures that also relieve the local population of energy prices. Double funding for this group is not appropriate.
- Not eligible are civil service pensioners and retirees unless they also earn income from agriculture, business, freelance work, or employment. Recipients of exclusively other income according to § 22 EStG are also not entitled to the energy price allowance (e.g., members of parliament). Students and young families who only receive parental allowance, as well as other persons who exclusively receive wage replacement or social benefits, are also excluded.
- The energy price allowance is generally determined with the income tax assessment for 2022, unless the allowance is paid by the employer according to § 117 EStG.
- The energy price allowance is paid by the employer in September 2022 if the employee is in a primary employment relationship on 1.9.2022 and is classified in one of tax classes 1 to 5. For mini-jobbers and temporary staff, payment is made through the employer only if the employee has previously confirmed in writing to the employer that it is the primary employment relationship. The confirmation must be added to the payroll account.
- The energy price allowance is not paid through the employer if they do not submit a payroll tax return. This particularly applies to cases of short-term or marginal employment (e.g., in private households) where payroll tax is levied at a flat rate according to § 40a EStG. In this case, employees can receive the energy price allowance by submitting an income tax return.
- An energy price allowance paid by the employer must be indicated in the electronic payroll tax certificate with the capital letter E (§ 117 para. 4 EStG).
- The energy price allowance is taxable and is taxed at the individual tax rate. Additionally, church tax and solidarity surcharge may apply. According to the legislative justification, "separate information in the income tax return is not required for the taxation of the energy price allowance." For employees, the energy price allowance must be considered as income according to § 19 para. 1 no. 1 EStG for the year 2022. For mini-jobbers and temporary staff with wages taxed at a flat rate according to § 40a EStG, taxation of the energy price allowance is waived for simplification reasons (§ 119 para. 1 EStG).
- For self-employed persons, the energy price allowance is not part of business income but is considered "income from other services" according to § 22 no. 3 EStG for the year 2022. However, the exemption limit of 256 Euro, which usually applies to such income, is not applied here (§ 119 para. 2 EStG). Since the energy price allowance is not part of profit income, it is not subject to trade tax.
- The energy price allowance is exempt from social security contributions as it is not considered wages within the meaning of § 14 SGB IV.
- The energy price allowance is not to be considered as countable income for income-dependent social benefits (§ 122 EStG).
The largest group of eligible persons is relieved promptly through payments from employers (employees) or the reduction of income tax prepayments (self-employed) without having to take action themselves. If an income tax return for 2022 is submitted and the eligibility requirements for the energy price allowance are met, the energy price allowance will be determined ex officio with the 2022 income tax assessment.
A special application is not required. For employees, the energy price allowance is only determined if it has not yet been paid out by the employer, for example, because there was no employment relationship on 1.9.2022.
Further information can also be found in the FAQs of the Federal Ministry of Finance.
(2022): How do employees receive the energy price allowance?
Do retirees and pensioners also receive the energy allowance?
From 1 September 2022, all income tax-liable employees in tax classes I - V received a one-off energy price allowance of 300 Euro as a salary supplement, paid through the employer's payroll. Self-employed individuals received an advance through a one-off reduction in their income tax prepayment (§§ 112 to 122 EStG, introduced with the "Tax Relief Act 2022" of 23 May 2022). Pensioners and retirees were not previously eligible.
Currently, from 1 December 2022, retirees and pensioners also receive a one-off energy price allowance (EPP) of 300 Euro. The one-off payment is made automatically by the pension payment offices. The energy price allowance (EPP) is granted to those who, on the cut-off date of 1 December 2022, are entitled to an old-age, disability, or survivor's pension from the statutory pension insurance or to benefits under the civil service or military pension law. Eligibility exists only with a residence in Germany ("Act on the Payment of an Energy Price Allowance to Pension and Benefit Recipients and on the Extension of the Transitional Area" of 7 November 2022).
- Retirees from the general and miners' pension insurance as well as the farmers' old-age security are entitled to the one-off payment. This also includes persons receiving a pension due to compulsory insurance in the artists' social insurance. Recipients of benefits under the civil service and military pension law are also eligible. For benefit recipients of the federal states and municipalities, the regulatory competence lies with the federal states.
- Retirees from professional pension schemes are not eligible. For this group of people, the regulatory competence does not lie with the federal government, but with the federal states. Retirees from statutory accident insurance are also not eligible.
- Those receiving a pension from an EU state but residing in Germany are entitled to the energy price allowance. However, an application must be submitted to the Deutsche Rentenversicherung Knappschaft-Bahn-See in 44781 Bochum between 9 January and 30 June 2023.
- The payment is independent of marital status. In the case of a married couple, both can receive the EPP if both receive a pension. If a person receives multiple pensions (e.g. old-age pension and widow's pension), the energy price allowance is only paid once. This also applies to simultaneous receipt of a pension and a civil service pension.
- The energy price allowance is subject to income tax. Whether there is actually a higher tax burden or a tax assessment at all depends on the individual circumstances in each case. A tax assessment for the year 2022 would be required for the first time if the taxpayer's income in 2022 exceeds the basic allowance (10,347 Euro).
- The energy price allowance is not subject to contributions to statutory health and long-term care insurance.
- The energy price allowance is not counted as income for means-tested social benefits. The allowance may also not be seized. Note: The non-seizability is explicitly regulated by law; thus, there is a difference to the energy price allowance for employees and self-employed persons, which can be seizable according to the decision of the Norderstedt District Court of 15 September 2022 (66 IN 90/19).
- No application is required for the payment of the energy allowance. The payment is made automatically.
- The EPP is paid out by the pension payment offices by 15 December 2022. Persons who receive a pension for the first time at the end of December will generally receive the energy price allowance at the second payment date at the beginning of 2023. The payment at the beginning of January is also automatic. No application is required. A total of around 19.7 million retirees are to receive the energy price allowance. The costs amount to around 6 billion Euro. The financing is provided from tax revenues, not from the contribution income of the pension insurance.
Can retirees receive the energy price allowance if they have already received an allowance for employees? Yes, the payments do not exclude each other. This is not an unjustified double payment. You can be eligible in both groups. Retirees do not need to report if they have already received an energy price allowance. However, if multiple pensions are received (e.g. old-age pension and widow's pension), the EPP is only paid once (information from the BMAS and the German Pension Insurance).
FAQs on the topic "Energy price allowance for retirees" can be found on the BAMS website: Questions and Answers on the Energy Price Allowance (EPP) for Pension and Benefit Recipients
(2022): Do retirees and pensioners also receive the energy allowance?
