December discount and gas price cap: what consumers need to know now

December discount and gas price cap: what consumers need to know now

Now it’s official: Customers will be deprived of the December deduction for gas and heating. The federal government bears the costs for this. Why saving energy is still worthwhile.

The state pays customers their December payment for gas and district heating.
© Symbolic photo: dpa/Frank Rumpenhorst

Due to the increased energy prices, the federal government wants to relieve millions of gas customers with a one-time payment. To this end, the federal government had already launched a draft emergency aid law for gas and heat in the cabinet on 2 November. The Bundestag and subsequently the Bundesrådet have now approved this.

So it’s official now: the federal government is paying consumers their December deduction for gas and district heating. But why doesn’t this mean that it no longer pays to save energy in December? An overview.

Why does the federal government pay the gas tax credit?

The emergency aid must compensate for the increased energy bills and build a bridge over time until the planned introduction of the gas price brake next spring, according to a paper from the Ministry of Economy.

As a first step, proposals from the gas expert commission set up by the government have been implemented.

Who pays for the emergency aid?

Overall, the relief should be in the higher single-digit billions. This is financed by the so-called defense shield of up to 200 billion euros, with which the federal government will mitigate the consequences of high energy prices. The package must be financed by new debt.

Who gets the emergency aid?

According to the federal government, the following benefits benefit from the emergency aid:

  • Households using gas or district heating.
  • Small and medium-sized businesses that are billed using standard load profiles and consume less than 1.5 million kilowatt-hours of gas per year. According to the government, the purchased natural gas must not be used for commercial electricity or heat production.
  • Rental apartments and home owner associations that buy gas.
  • Regardless of annual consumption: Approved nursing, preventive and rehabilitation facilities, state, state-recognized or non-profit facilities in education, science and research, and workshops for the disabled or other service providers.

How does emergency aid work in December?

The new law regulates how consumers are to be exempted from gas and heating expenses in December 2022. For natural gas buyers, this means that they do not have to pay their advance or payment in December. Amounts paid despite this must be taken into account by natural gas suppliers on the next invoice. This applies, for example, to the sole owner of a single house who receives a gas bill from their gas supplier, but also to small and medium-sized businesses. The suppliers are said to have a “repayment or prepayment claim” against the state.

What do I need to do to receive emergency assistance?

Authorized persons do not need to do anything initially. The suppliers must ensure that. They receive the money for the advances from the state and therefore do not have to demand advance payment from their customers in December. Alternatively, you can also include paid amounts in the next invoice.

Why is it worth continuing to save energy?

The advance payments that the gas suppliers collect each month are calculated based on consumption in the past year.

Customers whose consumption causes higher costs than are covered by the advance payments will in future have to make additional payments and higher prepayments. Thrift is worthwhile despite the relief. Because their quantity is not affected by the current consumption.

How does the financial relief for district heating work?

“Heating utilities must compensate their customers financially for their December payments – either by waiving an advance or payment in December or by making a direct payment to customers,” the federal government says. A combination of both elements is also possible.

What rules apply to tenants and landlords?

For tenants and landlords, there is a separate regulation on the transfer of the relief. Many landlords have not yet adjusted the monthly advance payment to the increased gas and energy prices. Many tenants therefore still pay moderate discounts based on the previous year’s prices and consumption. The higher prices accompany the heating bill for the year 2022. This will be created in the coming year – and then there is a risk of violent increases.

Therefore, the relief is transferred from the landlord to the tenant with the next annual heating bill. Landlords are obliged to inform tenants of the estimated amount of the credit already in December.

For home owner associations, rules apply analogously to the relationship between landlord and tenant: The apartment owner association should pass on the relief to the apartment owners during the annual statement. If the owner-occupied flat is rented out, landlords should pass on the relief received to the tenants. (with dpa)

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