One-off payment, gas price cap, electricity price brake: this is how consumers get their money

Created: 03/11/2022 08:23

By: Lisa Mayerhofer

The government wants to relieve the citizens of the high gas and electricity prices.

But how can consumers get the help from the gas and electricity price brake?

Berlin – The federal government has decided on several aids because of the high gas and electricity prices: A one-time payment that is to flow this year, as well as a gas and electricity price cap.

On Wednesday, Chancellor Olaf Scholz (SPD) will advise the heads of government of the federal states on open financial issues in the event of relief.

For the government, disbursing aid to citizens is too complicated because the authorities lack the necessary data.

Therefore, the payment should be taken over by the energy suppliers.

An overview of the planned aid and how it should be received by consumers:

When will the aid be paid out?

The government has planned the one-off relief payment for households and companies for December.

The electricity price brake should then come in January, while the gas price brake should only take effect from March, but probably earlier: "Retrospective relief as of February 1st is the aim," says a government paper published on Tuesday.

The energy price brakes are to apply until April 30, 2024.

How should the one-off payment in December work?

With a one-off payment, the state takes over the December discount via a credit note from the respective energy suppliers.

Consumers should benefit from grid-connected natural gas and heat.

Anyone who has the costs deducted from their account every month by their energy supplier now has it very easy: you don't have to do anything - and you can simply be happy that less money is being drawn from your account.

In the case of natural gas, the amount of the credit should be based on the monthly average annual consumption and the agreed price as of December 1st.

In addition, there is a “proportionate relief for the other price elements”.

The prices, which in some cases increased significantly at the end of the year, are to be taken into account.

A simplified procedure applies to district heating: Here the amount of the September bill and a “flat-rate adjustment factor” should be used, which includes the price increases up to December.

If tenants regulate the supply through their landlords, a different procedure is provided.

Then the December relief should be passed on with the next annual heating bill.

However, this can take time: Landlords have one year to prepare and submit the statement.

In the worst case, tenants will not find out how high the relief for this December really is until December 2023.

High earners must not forget: The one-off payment must be stated as a monetary benefit in the tax return - but only from a certain annual income.

According to Federal Minister of Economics Robert Habeck, the threshold is expected to be 75,000 euros.

The Federal Cabinet intends to adopt a corresponding draft law on Wednesday.

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How should the gas price brake work?

Households and small businesses are to receive a guaranteed gross gas price of 12 cents per kilowatt hour for 80 percent of their current consumption.

The contract price should apply to the remaining 20 percent of consumption.

For district heating, the guaranteed gross price should be 9.5 cents.

The annual consumption forecast on which the advance payment for September was based should apply as the previous year's consumption.

According to a paper from the Chancellery, prices for new gas procurement contracts average around 21 cents per kilowatt hour because of the Russian war of aggression in Ukraine.

The monthly relief from the gas price brake should not have to be repaid, even if the actual consumption is well below 80 percent of the previous year's consumption.

This should give an incentive to save energy.

The same applies here: If you pay the deductions directly to the gas supplier, you will receive the premium in the gas bill.

For example, if you are a tenant and pay your heating costs through the ancillary costs, the landlord or billing service provider will calculate the amount of the savings and reduce the down payment accordingly.

Important: Gas customers who still pay prices of 12 cents or less will not change their gas bill, as the price is below the cap.

What is planned for the electricity price brake?

An electricity price brake is to take effect from January.

As with the gas price brake, a basic quota of 80 percent of previous consumption for a gross price of 40 cents per kilowatt hour is to be made available for households.

The historical consumption should probably be based on the annual consumption forecast.

According to the comparison portal Verivox, the nationwide electricity price currently averages 48.16 cents per kilowatt hour.

For a three-person household with an annual consumption of 4000 kilowatt hours, the current annual costs would be around 1926 euros per year on this basis.

With the planned cap, the total annual costs would fall by around 14 percent to 1665 euros.

This corresponds to a relief of around 260 euros per year.

Here, too, the payout works according to the same principle: the premium is processed via the billing by the electricity supplier and can be viewed directly by the electricity customer on the bill.

However, anyone who still pays 40 cents or less does not benefit from the electricity price brake. 

What other measures is the government planning?

A hardship fund is also planned, which should have a volume of 12 billion euros.

Regulations are planned for consumers and small and medium-sized companies that are not sufficiently relieved by the price brakes - according to the paper, this should also apply to housing companies as well as hospitals, care facilities or cultural institutions.

Grants and loans are planned.

Details on the exact application conditions are open.

According to the paper, the federal government is also striving for a hardship regulation for owner-occupied residential property, where the stockpiling of other heating materials such as oil and wood pellets leads to “unreasonable burdens”.