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The bottom line is that citizens will have a little more in their pockets next year. A number of changes are pending in taxes, child benefits, but also fuel costs and health insurance.
By Andreas Braun, tagesschau.de
Germans will have about two percent more purchasing power per capita next year. This is what the Society for Consumer Research (GfK) found in a study. The average wage earner receives 453 euros more than the previous year.
It is questionable how much remains “in real”, that is, after taking into account the inflation rate. According to calculations by the Ifo Institute, this economic relief will cost the federal budget around 15,000 million euros.
There are no solos, for almost everyone
The biggest relief for taxpayers comes from the almost total abolition of the solidarity surcharge. For 90 percent of today’s payers it is completely eliminated, for another 6.5 percent, at least partially. It is only deducted in full from the income of the highest income earners.
A single can save up to 930 euros a year by eliminating solos, a couple more than 1860 euros. However, those who earn very little benefit hardly, because the solidarity surcharge already represents only small sums.
The director of the German Institute for Economic Research (DIW), Marcel Fratzscher, believes that abolishing solos makes little sense in the time of the Crown: “If you had known a few years ago that the pandemic was coming, you would have partially cut solos and the download probably not decided. ” However, there is a small horse step left for private investors: for investment income, the soli at the old 5.5 percent level is still collected in addition to the 25 percent flat tax.
VAT at 19 percent
The effect of the temporary reduction of VAT from July 2020 from 19 to 16 percent was also controversial. The old tax rate will apply again starting in January. The reduced tax rate goes up from five to seven percent.
Road tax
Drivers also have to pay a little more for road tax. However, it only increases for most fuel-efficient newly registered vehicles. Starting in 2021, an amount based on vehicle CO2 emissions will be added to a base amount based on engine size. For fully electric vehicles, the tax exemption will run until 2025.
Child benefit
Families with children can expect more child benefits in the next year. The child benefit increases to € 219 per month for the first and second child, € 225 for the third child and € 250 for the fourth child. The tax allowance for children will be increased from 7,812 to 8,388 euros.
Parents can use the child benefit or the child allowance. Tax relief reduces income tax and is therefore especially useful for people with high incomes. Very low-income families benefit less from the increase because the child benefit is offset by Hartz IV. However, some of them are entitled to an allowance per child, which will go from a maximum of 185 to a maximum of 205 euros in 2021.
Basic allowance
The income limit above which taxes must be paid, the so-called basic tax allowance, is increased by 336 euros to 9,744 euros. As a result, most citizens pay less taxes. The limit from which the maximum tax rate of 42 percent applies also rises slightly to an annual income of 57,919 euros.
Amount of aid for single parents
There are significant tax breaks for single parent families. For single mothers and fathers who are entitled to child benefit, the amount of child support increases from € 1,908 to € 4,008. The tax base will be reduced by this amount in 2020. For each additional child there are 240 additional euros.
Refuel and heat
Fuel, gas and heating oil bills will tend to be higher for consumers in the next year. Because from 2021 there will be a national price of CO2. Companies such as refineries that sell gasoline, diesel or diesel for heating have to initially pay 25 euros per ton of greenhouse gas. The price can even go up throughout the year. Fossil fuels should become more expensive and climate-friendly alternatives should be favored. Mineralölwirtschaftsverband expects the cost of refueling to rise from ten to eleven cents per liter.
Commuter flat rate
In return, there is relief in the form of a flat rate for travelers. From kilometer 21 it increases from 30 to 35 cents per kilometer. According to the taxpayers association, with a journey of 35 kilometers you can claim around 165 euros more in lump sum of distance than before in the next year.
Home-Office-Pauschale
Anyone who has worked at home thanks to Corona in 2020 can deduct taxes for five euros a day at home. This flat rate is only valid for up to 120 days at the central office, that is, 600 euros. However, the amount will be offset by advertising costs. Only those who receive more than 1000 euros, including the flat rate from the home office, benefit from taxes. The home office flat rate also applies to next year 2021.
Electricity prices: at least stable
The EEG surcharge to promote green electricity will also be slightly reduced to 5.4 billion euros of tax revenue. It is an essential part of the price of electricity. Otherwise, the rate would have increased considerably. This means that electricity prices in Germany remain largely at their high level in international comparison. According to a survey of comparison portals, only a few providers plan to lower their prices.
minimum salary
With the change of the year, the minimum wage will rise from 9.35 euros to 9.50 euros per hour. From July it will be 9.60 euros per hour. For apprentices, the minimum salary increases to 550 euros in the first year of apprenticeship, after the previous 515 euros.
Basic pension
The basic pension will be officially introduced on January 1. It is intended to benefit insured persons who have contributed to the pension fund for many years, but can still expect low statutory pensions. The Deutsche Rentenversicherung first checks the claims of the insured. Pension notices must be sent by the end of 2022 at the latest. Payments will also be made retrospectively to 2021.
There will probably not be an increase in the statutory pension for all pensioners in 2021. In the Corona year, the income of the employees did not increase on average, and the amount of the pension is based on this. When adjusting pensions from East to West, there could be a premium of around 0.7 percent for East German retirees.
Health insurance: additional increases in contributions
The pandemic is causing legal health insurance companies to have huge additional needs of approximately 16.6 billion euros. Only part of this is covered by federal funds. Therefore, insured persons should have to adapt to the trend of increasing additional contributions. On average, the Ministry of Health and Finance had set a goal of an increase of 0.2 percentage points to the 1.3 percent additional contribution. However, the health insurance themselves decide the increases.
Lump sum of care
The tax allowance will be increased and expanded for people who care for a relative at home: for care levels 2 and 3, the lump sum will be 600 and 1100 euros, respectively. For people with levels of care 4 and 5, the amount will be increased to 1,800 euros.
