Child benefits are going up

If you have children under the age of 25, we have some good news for you – monthly Kindergeld payments (child benefits) are going up by €15 per child starting in January.

In the future, parents will receive €219 for their first two children, €225 for their third child and €250 for every subsequent child.

Perfect timing for all those corona pregnancies… 

Rise in minimum wage

More good news, this time for people working in low-paying industries such as the gastronomy sector. The minimum wage will increase by €0.15 from €9.35 to €9.50 per hour.

And that is just the beginning, the Mindestlohn (as it is called in German) is going to rise in stages across the year until it reaches €10.45 by the beginning of 2022.

Another wage increase involves those doing training programmes. From the beginning of the year they’ll receive a minimum of €550.

Meanwhile, for those not currently in employment, jobless payments will go up slightly to €446 a month.

Photo: DPA

End of the Soli

More money saving good news: the Solidaritätszuschlag, a tax that was introduced after reunification to help rebuild the east, will be wound up for the majority of taxpayers.

The low tax level for paying the Soli, as it is normally called, will be raised to such an extent that parents of two children or more will only pay it if they earn a combined €151,000. Singles meanwhile will have to earn over €61,700 to still face Soli payments.

In other words, around 90 percent of the employed will no longer pay the tax.

READ ALSO: Taxpayers in Germany to receive boost as 'solidarity tax' almost entirely abolished

Rise in public broadcaster fee

The so-called Rundfunkbeitrag is to go up by 86 cents to a monthly payment of €18.36. The public broadcasters, which include TV channels ARD and ZDF, have a €1.5 billion hole in their budget. The budget is funded almost entirely through a compulsory payment that every household makes.

This increase is supposed to come into effect on January 1st, but the state parliament in Saxony-Anhalt has so far refused to back it, something that is leading to serious friction inside Angela Merkel's CDU party.

READ ALSO: EXPLAINED: How to pay Germany's TV tax or (legally) avoid it

Vehicle costs to go up

Photo: DPA

Here's a change that could mean more expenses for people buying new cars. An emissions tax hike will be introduced on January 1st which will double vehicle tax on new cars that have a C02 emission level of more than 195 grams per kilometre.

On the other hand, cars that are super efficient and emit below 95 grams of CO2 per kilometre will pay less tax in future. So there is a clear incentive there to buy a more climate friendly car.

Fuel prices are going to go up, too.

A C02 trading scheme that was agreed upon in 2019 will come into force, meaning petrol suppliers will have to buy emissions certificates.

The cost is sure to be passed on to the consumer, with car owners paying an estimated seven cent per litre extra for petrol and eight cents more for diesel at the tank.

Basic pension

Low earning pensioners have a nice surprise in store for them on January 1st, 2021. The basic pension for low earners will come into force.

The bill, which caused years of debate inside two coalition governments, will apply to all those who worked for at least 33 years but did not earn enough to gain a satisfactory pension in their old age.

The basic pension has been criticised for the complication involved in calculating it.

SEE ALSO: Everything that changes in Germany in December 2020