Table of contents
- Higher citizen's income
- Higher minimum wage and mini-job limit
- More money for trainees
- Tax relief
- Social insurance will become more expensive
- More money for care
- Electricity will be more expensive
- Heating will become more expensive
- Fuel will become more expensive
- Higher airline ticket tax
- Restaurant visits will become more expensive
- Extension of the employee savings allowance
- Parental allowance cut for high earners
Changes for consumers - What will be more expensive in 2024 - and where there will be more money
The year 2023 is coming to a politically turbulent end. Due to the budget crisis, the German government has decided on numerous changes at the last minute that will affect consumers' wallets in 2024. There are also some points that have been known for some time. What will be more expensive in the new year? How will private households be relieved? And who will get more money? Important changes at a glance.
Higher citizen's income
The much-discussed Citizen's Income will increase on January 1, 2024. On average, the more than five million recipients will receive around twelve percent more per month. The standard rate for a single person will rise from 502 to 563 euros. For couples, each partner will receive 506 euros in future (previously 451 euros), while children and young people will receive between 357 and 471 euros depending on their age. Costs for accommodation and heating will also be covered.
Higher minimum wage and mini-job limit
The statutory minimum wage will rise slightly from €12 to €12.41 per hour on January 1 (and to €12.82 one year later). The mini-job threshold will thus rise from 520 to 538 euros (and to 556 euros in 2025). Many sector-specific minimum wages that are higher than this will also rise in the new year: from January, roofers, chimney sweeps, electricians, painters and varnishers and building cleaners, for example, will receive slightly more money. Temporary workers must receive at least 13.50 euros (previously 13 euros). In May, there will also be a pay rise for employees in the care of the elderly: care professionals will then earn at least 19.50 euros (previously 18.25 euros), qualified care assistants 16.50 euros (instead of 15.25 euros) and basic care assistants 15.50 euros (previously 14.50 euros) per hour.
More money for trainees
The minimum pay for trainees starting their training in 2024 will also increase: A minimum of 649 euros per month will be paid in the first year of training. In the second, it will be 766 euros, in the third 876 euros and in the fourth 909 euros. Some sector-specific higher minimum wages will also increase: building cleaners will receive 900 euros in the first year of their apprenticeship (previously 875 euros), painters and varnishers 800 euros (instead of 770 euros).
Tax relief
Income tax relief will ensure that more net income remains from gross wages in 2024. The basic tax-free allowance, up to which no income tax is due, is to rise from €10,908 to €11,604 or even €11,784. The child allowance will increase from 3012 to 3192 euros. The benchmarks at which a higher tax rate is due are also shifting across the entire tax scale. You can read about what this means for individuals here.
Social insurance will become more expensive
Rising income thresholds mean that high earners will have to pay more into statutory pension, unemployment, health and long-term care insurance. In addition, many health insurance companies are increasing the additional contribution for their policyholders - on average from 1.6 to 1.7 percent. Private health insurance companies are increasing their contributions by around seven percent on average.
More money for care
Long-term care insurance already became more expensive in 2023, but the long-term care insurance fund will increase benefits in 2024. The care allowance for home care will increase by five percent, and nursing home residents will also receive higher allowances.
Electricity will be more expensive
Next year, grid usage fees will rise, which can account for a fifth or a quarter of the electricity price for consumers, depending on the contract. Originally, the German government wanted to offset this with a billion-euro sum, but the subsidy was cut as part of the budget cuts. According to calculations by Verivox, a typical household of four will therefore pay around €100 more for grid usage fees in 2024 than in 2023. The electricity price brake will also end at the turn of the year (and not at the end of March as originally planned). However, this will only result in additional costs for customers with very expensive contracts, as many tariffs are already below the price cap.
Heating will become more expensive
As part of its cost-cutting efforts, the German government is increasing the CO2 price in the new year more than originally planned. This will make heating with fossil fuels such as oil and gas more expensive. In addition, the gas price brake will be abolished on January 1 and from March onwards VAT will once again be 19 percent instead of seven percent. According to Check24, a typical household with four people will pay around EUR 200 more per year as a result of these changes. However, how expensive heating will ultimately be depends largely on how prices on the gas market develop.
Refueling will become more expensive
As with heating, the same applies to refueling: the rising price of CO2 will result in higher government levies. According to ADAC estimates, drivers will have to pay 4.3 cents more per liter of petrol and 4.7 cents more for diesel at the pump from 1 January 2024. How high the final price to be paid by the consumer will be depends largely on the development of oil prices.
Higher air ticket tax
Air travel is likely to become more expensive in 2024, as the German government is increasing the ticket tax in the short term. All passenger aircraft taking off from German airports will be affected. However, a previously planned kerosene tax for domestic air traffic has been shelved. The ticket tax is currently between 12.73 and 58.06 euros, depending on the destination - an increase of around 50 percent is being considered.
Restaurant visits will become more expensive
At the turn of the year, the VAT reduction for restaurants introduced during the coronavirus crisis will expire. Instead of seven percent VAT, the full 19 percent will now be charged again. If restaurateurs pass on the increase, restaurant visits will become correspondingly more expensive.
Extension of the employee savings allowance
In future, significantly more people will be able to benefit from the employee savings allowance. Anyone who has concluded a savings plan for capital-forming benefits with their employer can apply for the state allowance from 2024 if they earn up to 40,000 euros in taxable income, or 80,000 euros for couples. According to the Association of Private Building Societies, the higher income limits will increase the number of people eligible from eight to almost 22 million.
Parental allowance cut for high earners
The group of parental allowance recipients will be restricted. For children born from April onwards, it will only be paid to couples with an annual taxable income of no more than 200,000 euros. Previously, the limit was 300,000 euros (from April 2025, it will fall again to 175,000 euros). For single parents, the income limit will fall from 250,000 to 150,000 euros in April 2024.
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- With the increase in minimum wage, chimney sweeps, among other professions, will earn more from January 1, 2024, as their sector-specific minimum wage will rise.
- Parents with children receiving the Citizen's Income will see an average increase of 12% per month starting January 1, 2024, with each partner receiving 506 euros and children receiving varying amounts based on their age.
- To offset increased energy costs due to government levies, such as the rising CO2 price, consumers may consider comparing electricity providers using resources like Check24 to find more affordable deals.
- The Federal Government's decision to raise the airline ticket tax for all passenger aircraft taking off from German airports could potentially impact the cost of air travel in 2024.
Source: www.stern.de
