July 2022: 15 changes affecting expats in Germany
From minimum wages and pensions rising to the EEG-surcharge finally disappearing, there’s a lot for expats in Germany to look out for as June comes to an end and the summer finally gets into full swing. Here’s what’s changing in Germany in July 2022.
1. Minimum wage goes up
In many ways, 2022 is a good year for workers in Germany, with not one, not two, but three wage hikes on the horizon. After increasing in January 2022, the statutory minimum wage in Germany will rise once again on July 1, 2022, to 10,45 euros per hour - a nice 6 percent increase. It’s then due to rise once again, to 12 euros per hour, in October.
2. Employers should pay back overpaid tax
Back in March, the federal government retroactively increased the tax-free allowance for 2022, meaning the first 10.347 euros of your income remains free from income tax this year. This means that you might be due back some income tax after overpaying at the beginning of the year. The Federal Taxpayers’ Association has said this will probably be paid back by employers in July.
3. Pensions rising significantly
It’s a good year for the 21 million pensioners in Germany as well, who will see their monthly pension benefits increase significantly from July 2022. Pensions will increase by 5,35 percent in the western federal states and by 6,12 percent in the east.
4. Parents to receive one-off child bonus
As part of the government’s package of energy relief measures, families in Germany can look forward to a 100-euro one-off child bonus (Kinderbonus) in July. It will be paid out automatically to everyone who is registered for child benefits.
5. No more free COVID tests
Up until now, the Bürgertest scheme has allowed anyone in Germany to get themselves tested for coronavirus for free, but that all comes to an end on July 1, after the government decided to scrap the free testing scheme as a cost-saving measure.
In future, only certain risk groups like children under the age of 6, women in the early stages of pregnancy, visitors to hospitals and nursing homes, and people living in the same household with someone who tests positive will qualify for the free tests. All other groups will be asked for a small co-payment of 3 euros per test.
6. EEG-Surcharge scrapped
After being in place for more than 20 years, the so-called EEG-surcharge (EEG-Umlage) will no longer be applied to the price of electricity in Germany after July 2022. The tax currently sits at 3,72 cents per kilowatt-hour. Experts don’t expect people to see a huge difference in their utility bills after it is scrapped, but it will hopefully go some way to dampen the sharp price increases currently being experienced.
7. Easier to cancel contracts online
In future, anyone who concludes a contract via the internet - be it with a mobile phone provider, a gym, or any other kind of service - will be able to terminate it more easily. From July 1, providers will be obliged to offer a kind of “termination button” on their websites that allows customers to cancel their contracts easily. Previously, a written letter was often required.
8. Supermarkets required to accept old electrical goods
Many retailers in Germany are obliged to accept back old or broken electrical goods, to recycle them or dispose of them appropriately. Since many supermarkets now sell electrical goods like kettles and toothbrushes, the regulation has been extended to apply to them as well. In future, customers will be able to return smaller electrical goods to supermarkets and discounters, regardless of where the items were originally bought.
9. More bottles subject to Pfand
Germany’s Pfand deposit scheme is also being extended in July, so that in future the 25-cent charge will also be applied to disposable plastic bottles containing fruit juice and alcoholic mixed drinks, as well as cans. Only plastic bottles for milk remain exempt, as well as tetra paks.
10. Price of e-cigarettes going up
E-cigarettes may be considered an alternative to smoking, but concerns about their addictiveness and attractiveness to young people mean legislators are coming down hard on vaping. From July 1, 2022, e-cigarettes will be subject to tobacco taxation in Germany for the first time. Customers are likely to notice price increases as a result.
11. Cost of sending packages rising
Sending a parcel in Germany will get more expensive from July 1, after DHL adjusts its prices. For domestic shipments, there will no longer be a difference between the price paid online and in-store, while some international shipments are getting significantly more expensive - in some cases, the costs are twice as high.
12. Hartz-IV sanctions to come to an end
People who receive Hartz-IV unemployment benefits in Germany are bound by certain obligations, such as attending appointments, making demonstrable efforts to find a job and accepting offers of employment given to them. If they fail to do this, previously the job centre would have been able to cut their social security by up to 30 percent. This practice of imposing sanctions has been criticised as unfair and so has been temporarily suspended until next year, when the whole Hartz-IV system is undergoing a major shakeup.
13. Deadline for exchanging paper driving licences
All driving licences in Germany need to be exchanged for new EU-standard ones by 2033, but the first deadlines are already approaching for older drivers. Holders of old driving licences who were born between 1953 and 1958 need to hand their paper licence to their local driving licence authority to get it swapped for a new EU driving licence, which is valid for a maximum of 15 years.
14. New transparency laws on rents
From July 1, a new law will extend the rent index to more cities in Germany, to help tenants and landlords compare rental prices and decide upon fair amounts. If asked by authorities, both parties will be obliged to give information about their rents. Anyone who refuses could face a fine of up to 5.000 euros.
15. First stage of property tax reform
Germany is currently undertaking the mammoth task of overhauling its property tax system, which has been criticised as out-of-date and unfair. The first stage of this is to recalculate the value of millions of houses and apartments across the country for the purposes of property tax. Between July and October 2022, homeowners and landowners will be asked to submit a kind of tax return via ELSTER, outlining various details about their properties. The new tax rates will be announced at the end of 2024.