New earnings limit for midi jobs: the cabinet decides on a one-time payment for pensioners

The agreed energy flat rate of 300 euros is intended to relieve pensioners in the event of rising energy and living costs and will be paid out automatically on December 1st.

New earnings limit for midi jobs: the cabinet decides on a one-time payment for pensioners

The agreed energy flat rate of 300 euros is intended to relieve pensioners in the event of rising energy and living costs and will be paid out automatically on December 1st. The federal government is also in the process of raising the earnings limit for employees in the midi-job sector.

German pensioners are to receive a one-time payment of 300 euros by December 15 to compensate for the high energy prices. In Berlin, the Federal Cabinet approved a corresponding proposal from Labor and Social Affairs Minister Hubertus Heil. In difficult times, when prices for energy and food have risen sharply, the welfare state is "on the side of the people". It was also decided to raise the upper limit for so-called midi jobs from 1,600 to 2,000 euros.

The EUR 300 energy flat rate for retired people is part of the third relief package announced by the traffic light government at the beginning of September. In the second relief package from March, millions of pensioners received nothing from the energy allowance contained there because it was only paid to all taxpayers in tax brackets I to V.

According to the Federal Ministry of Social Affairs, everyone who is entitled to a statutory old-age, reduced earning capacity or survivor's pension or to pension payments under the Civil Service Act or the Soldiers' Pension Act as of December 1, 2022 will now receive the energy flat-rate. Entitlement therefore only exists if you are resident in Germany. According to the ministry, the payment is made automatically, applications are not necessary.

The energy price flat rate is not taken into account for income-related social benefits and is not subject to the obligation to contribute to social security, the ministry emphasized. However, it should be subject to tax. The government had estimated the cost of the lump sum at a total of around six billion euros when it was announced.

With the increase in the upper earnings limit for so-called midi jobs, employees with low wages would be relieved of an additional 1.3 billion euros a year in social security contributions, the ministry said. At the same time, "the incentives to work beyond a mini-job would be strengthened".

Unlike mini jobs, midi jobs are not exempt from social security contributions. However, staggered reduced rates apply. Employees only have to pay the full social security contributions from the upper limit of currently 1,600 and in the future 2,000 euros.

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