Immediate assistance for gas and heat passed by the Bundestag

The German Bundestag today adopted the Act on the December immediate assistance for final consumers of grid-based natural gas and heat customers in the second and third readings. This decision is an important milestone so that the legislation can enter into force by mid-November as planned. The assistance is to take effect in December 2022.

The legislation aims to give tangible help in December to households, businesses and small and medium-sized enterprises with an annual consumption of up to 1.5 million kWh. It implements the first part of the recommendations of 31 October 2022 by the Commission of Experts on Gas and Heating set up by the Federal Government. The Federal Government is also working intensively on the implementation of the remaining assistance, specifically the brakes on gas, heat and electricity prices, which are to be adopted in a further step.

The December immediate assistance offsets some of the increases in energy bills in 2022 and thus bridges the period until the planned introduction of the brake on gas and heat prices in the spring. Households and small and medium-sized enterprises consuming less than 1.5 million kWh of gas a year will receive assistance for December 2022. It is calculated on the basis of one-twelfth of the annual consumption forecast by the supplier for the take-off point in September 2022, and of the agreed gas price in December 2022. Alternatively, final consumers of grid-based gas will not initially be required to pay the contractually agreed advance payment or instalment in December 2022. Amounts that the final consumers still have to pay will be included in the next bill from their provider. Due to the different market situation for heat, compared with gas, there will be a one-off flat-rate payment of assistance for December. It is calculated on the basis of the level of the instalment paid in September plus an adaptation factor of 20% to reflect price increases since then.

Various special arrangements apply to tenants.

For example, some tenants have their own gas meter and thus their own contractual relationship with their provider. They will not be required to pay the contractually agreed advance payment or instalment in December 2022.

Many tenants are in a different situation. Many tenants do not have their own gas meters in their apartment. In such cases, there is no direct contractual relationship between the gas supplier and the tenant; rather, the billing takes place between the gas supplier and the landlord, and then between the landlord and the tenant. Many landlords have yet to adapt the monthly advance payment to reflect the higher energy costs. In this case, the higher prices in the billing of running costs for 2022 will reach the tenants in 2023. Here, landlords are to pass on the assistance to their tenants in the next annual bill for running costs. In this way, tenants will benefit from the assistance at the time when they may have to make supplementary payments to offset the price increases of 2022.

Other special features apply to tenants whose advance payments for running costs have already been increased due to the rise in gas or heating costs over the last nine months before the entry into force of the act. These tenants do not have to pay the increased amount in December. In buildings with central heating, one-quarter of the running costs accruing in December 2022 do not have to be paid if the rental contract was agreed in the last nine months, as it can be assumed, in the case of new rental contracts, that the level of payments of running costs already corresponds to the current price level.

In order to finance the assistance for the month of December, the gas suppliers and heat supply companies have an entitlement to reimbursement or an advance payment from the Federal Republic of Germany. This covers approximately 1,500 suppliers of gas and heat. They have to apply via their bank to KfW for their entitlement to be paid out following an audit by an appointed party.

The proposed wording for the act was adopted by the federal cabinet on 2 November. As the act passed through the Bundesrat, the following basic amendments were made:

• The taxation of the assistance is to be undertaken in the 2023 tax year. This is not stipulated in this act, merely announced. The aim is to establish a socially equitable arrangement. For tax-payers who pay the solidarity surcharge, this instalment will be taxed at the earliest in the tax returns for 2023 once the invoices have been sent out by the suppliers and facility managers. Further details will be stipulated in the legislative process on the brake on gas and heat prices.
• Child day-care centres and other facilities of child and youth support, providers of integration assistance (Social Code IX, Part 2) and certain other education and training establishments (e.g. of the chambers) are included in the category of institutions which will receive the immediate assistance irrespective of their level of consumption.

The act is to be finally considered in the Bundesrat on 14 November 2022, and is to enter into force as soon as possible after that.