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READER QUESTIONS

Reader question: Will retirees benefit from Germany’s energy relief package?

Students, freelancers, benefits claimants and employees are all set to get a financial boost from the German government this year - but have they forgotten about pensioners?

Published: 22 June 2022 16:01 CEST
Elderly people on a bench in Prerow
Three elderly friends sit together on a bench in Prerow, Mecklenburg Western-Pomerania. Photo: picture alliance/dpa/dpa-Zentralbild | Jens Büttner

Record levels of inflation, spiralling energy prices and fears of shortages… the news has been getting worse and worse for consumers in recent months.

At the start the year, the government announced it would be stepping in with numerous measures to help people pay their bills during these difficult months. But as more details of the measures emerged, there appeared to be one major omission: financial support for pensioners.

To find out whether pensioners will benefit from the relief packages, it’s worth taking a look at each of the measures in turn. In most cases, pensions have sadly been left out of the equation, but there are a few things that may help cushion their rising living costs.

READ ALSO:

€9 ticket and fuel tax cut 

We’ll start with the good news: the €9 monthly travel ticket and cut in energy tax on fuel are both designed to benefit everyone, including pensioners.

Unfortunately, the fuel tax cut doesn’t appear to have dampened prices at the pump very much. However, pensioners can enjoy cheap public transport throughout June, July and August with the €9 ticket. 

Überlingen Am Bodensee

Passengers exit a regional train in Baden-Württemberg at Überlingen am Bodensee. Photo: picture alliance/dpa | Felix Kästle

This is obviously great news for retirees who live in cities and parts of the country with good transport networks – but less good news for those who use their car to get around. 

The government’s third mobility measure – an increase in the commuter allowance to 38 cents per kilometre – is also unlikely to benefit the vast majority of pensioners. This measure allows workers who commute long distances to offset some of these costs in their tax returns. 

READ ALSO: Nine of the best day trips from Munich with the €9 ticket

€300 allowance for taxpayers

This flagship energy relief measure – a one-off payment for taxpayers – is another bit of support that pensioners may miss out on. 

The one exception would be pensioners who still work a part-time job to prop up their income.

Even if you’re only working a couple of hours a week, you’ll be entitled to a €300 bonus come September. It’s worth mentioning that this is taxable – but if you don’t earn enough to pay tax, the entirety of the €300 is yours to keep.

However, there may be a way that pensioners can get hold of the money even if they don’t have a regular job. As CDU finance expert Antje Tillmann explains: “It is enough, for example, that a pensioner looks after his grandson for one hour once in 2022 and receives €12 minimum wage from his children in return as part of a mini-job or from self-employment.

“Subsequently, he declares this income in the tax return and gets the energy price lump sum paid out in May 2023.”

READ ALSO: Who gets Germany’s €300 allowance – and when?

One-time heating allowance

As part of its first energy relief package, the government announced that recipients of housing benefit would be eligible for a one-time payment to help with their heating costs.

This is set at €270 for a one-person household and €350 for a two-person household, plus €70 for each additional family member. 

Pensioners who received housing benefit at any time between October 2021 and March 2022 should be eligible for this allowance, as well as people who currently receiving it. 

Pensioner counting money

A German pensioner counts cash in the kitchen. Pensioners who receive social support from the state could be eligible for one-off payouts. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

One-time allowance for benefits recipients

Pensioners who receive Grundsicherung (basic allowance) should be eligible for a one-time lump sum of €200, which will also be paid out to Hartz IV recipients.

Other allowances, such as the €100 Kinderbonus and €100 for people receiving Arbeitslosengeld I, are sadly unlikely to apply to pensioners. 

Scrapping of the EEG levy

The Renewable Energy Act (EEG) levy, which adds about 3.7 cents per kilowatt hour onto consumers’ energy bills, is set to be scrapped on July 1st.

This should benefit anyone with an electricity contract, including pensioners.

Tax relief measures

The government is raising the tax-free allowance for 2022 to €10,347 and raising the value of automatically deductible expenses to €1,200 per year.

Neither of these measures will benefit pensioners who don’t pay tax. 

READ ALSO: KEY POINTS: What Germany’s budget means for you

To sum up: Which measures can pensioners benefit from?

  • €9 ticket (for public transport users)
  • Fuel tax cut (for drivers)
  • Scrapping of EEG levy 

Pensioners claiming welfare could also benefit from:

  • €270 allowance for housing benefit recipients, and
  • €200 allowance for Grundsicherung recipients

Pensioners do seem to be getting a slightly raw deal in comparison to those in employment. However, there are some general measures they may benefit from, and those who are already getting help from the state should also receive a small income boost. 

READ ALSO: EXPLAINED: Germany’s plans to ditch sanctions for the unemployed

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INHERITANCE

EXPLAINED: How to write a will in Germany

German succession law is pretty clear on what happens to your assets if you die without a will. But there are some big advantages - particularly for foreigners - of writing one.

Published: 26 April 2024 10:19 CEST
EXPLAINED: How to write a will in Germany

First and foremost, the largest advantage when it comes to writing wills as a foreigner in Germany – is the option to decide which country’s law applies when you write your will.

“Foreigners living in Germany have a huge advantage over German citizens, because you can choose the law of your own country for your will – even if you live in Germany,” says Andreas Moser, a Chemnitz-based immigration and family lawyer who runs a popular blog on German citizenship and family law. “Dual citizens who are German and have another nationality also have this advantage.”

READ ALSO: Everything you need to know about German inheritance law

Whether you want to do this of course, depends highly on the other country concerned and its law – and how much it differs from German law.

In specific detailed cases, you may want to consult a lawyer who specialises in wills and estates. One example of how German law may differ though is that many countries don’t have “forced heirship”, which requires you to leave certain shares of your estate to certain immediate family members.

By contrast, Germany has forced heirship. If, however, you would like to get around this for some reason, you can specify that your will should go under the other country’s law – if, for example, that country doesn’t have forced heirship.

This is unlikely, however, to result in people resident in Germany you leave assets to being able to get around inheritance tax, as this counts towards the receiver’s tax and not the deceased’s. However, there are other cases when using either country’s estate law might have different implications for certain assets – something a specialised lawyer can give you more information about.

If you want your other country’s rule to apply, make sure you specifically state that in your will.

EXPLAINED: The rules around inheritance tax in Germany

When should you definitely have a will?

Moser suggests that foreigners in Germany who want their native country’s law to apply write a will and specifically state that as their wish.

He also recommends wills in particular for those who have “patchwork” families, where one or both spouses have been married before or have children from previous marriages – in order to avoid complicated proceedings over who gets what.

A family sit at a lake.

Foreigners in Germany – even if they are dual German citizens – can choose the succession law they want to apply in their will. Image by Eva Mospanova from Pixabay

How should I write a will?

When it comes to composing a will, you have three main options:

The first is to write an international will that’s valid in your home country and that specifically states that you want the law of your home country to apply. 

The disadvantage of this approach is that your heirs may have to later pay to have it translated into German. You can also arrange to have an official German translation of it done.

Your second choice is to handwrite a will and sign it. This is known as a holograph will or Eigenhändiges Testament in German. It can be in any language, although again – your heirs may have to pay to have it translated later.

This option also avoids certain expensive legal fees – and you can state which country’s law you want to apply. However, for it to be valid, it must be entirely handwritten and include the date and place of signature. It cannot be typed and signed. If you’re concerned about the will going missing, you can deposit it with your responsible probate court for a fee of €75.

The final option is to write a public testament – which is prepared by a German notary. These wills are pretty ironclad but can be expensive – with fees that differ depending on the size of the estate. Once prepared, the notary will then file it with the public registry – so there is always a record of it.

READ ALSO: Do foreigners in Germany owe tax on money that is inherited from overseas?

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