In view of the rapid increase in energy costs, those drawing a pension or pension will now also receive the energy price flat rate of 300 euros. Anyone who pursues a minor job can even receive it twice – completely legally.

In view of the persistently high price increases in the energy sector, the federal government decided in the aftermath that the approximately 21 million pension and utility recipients should also be relieved and receive an energy price flat rate (EPP) of 300 euros. Previously, the fact that retirees were not included in the windfall had caused a great deal of unrest, while many employees already had the money in their accounts by September. Among them are some retirees who are employed.

The latter can now look forward to a second EPP until December 15 – the payment is planned by then. And that’s completely legal. As reported by the German Pension Insurance Association in Berlin, this is not an unauthorized double payment for the approximately two million pensioners affected. And the Federal Ministry of Social Affairs also lets citizens know on its website: “The payments are not mutually exclusive.” In addition, the EPP is not taken into account for income-related social benefits and is not subject to the obligation to contribute to social security.

In principle, it is not necessary to submit an application to receive it. Payment is made automatically via the pension service of Deutsche Post AG, the Deutsche Rentenversicherung Knappschaft Bahn See or the Landwirtschaftliche Altenkasse. And the federal government will also make a corresponding one-off payment for the approximately 1.5 million federal pension recipients. Implementation is the responsibility of the Federal Ministry of the Interior.

However, the flat-rate energy price should be subject to tax. Whether there is actually a higher tax burden or a tax assessment at all depends on the individual circumstances in each individual case. A tax assessment for 2022 would be required for the first time in individual cases if the taxpayer’s income – unlike in previous years – exceeded the basic tax-free allowance of EUR 10,347 in 2022.

It should be noted, however, that income does not only mean the statutory pension, but all income. So, among other things, rental income, payments from a company, Riester or private pension and investment income.

The amount of tax actually incurred depends not least on which expenses can be claimed for tax purposes from the tax office. As with taxpayers who are still working, pensioners also have the opportunity to deduct various costs in their tax returns. These include, for example, health and long-term care insurance contributions, church tax, donations, contributions to insurance such as accident or liability insurance and health expenses.

The same applies to the costs that pensioners incur if they have the complex matter explained to them by an income tax assistance association or a tax consultant or if they want to have it checked to see whether there is a tax liability. Which is not a bad idea, because pensioners also have an obligation to bring the tax office. So you shouldn’t wait for the authority to knock on your door. Otherwise, this form of retirement can also lead to additional payments and sanctions in the form of penalty interest.

(This article was first published on Tuesday, November 01, 2022.)