... with money and income?

The future remains uncertain. That much is certain. Apart from that, however, there are also many changes and laws to come in the new year. These changes in the areas of money and income will then become important, as the North Rhine-Westphalia Consumer Advice Center informs, among others.

Employee savings allowance: income limits increase significantly

From January 1, the income limits for the employee savings allowance will rise from 17,900 to 40,000 euros taxable income for single people and from 35,800 to 80,000 euros for married couples. This will increase the number of people entitled to the allowance to 13.8 million. With the allowance, the state promotes saving with capital-forming benefits (VL) in the form of a building society savings contract or an asset participation such as an investment fund savings plan. Many employers offer VL. Employees can top these up from their own net salary or pay them in full themselves. The allowance for VL building society savings is nine percent of a maximum savings sum of 470 or 940 euros per year. For fund savings, it is 20 percent of a maximum of 400 or 800 euros per year.

Citizen's allowance will be increased

Anyone who is dependent on social assistance or citizen's allowance will receive more money from January. For single adults, the rate will rise by 61 euros to 563 euros per month. Young people aged 14 to 17 will receive 471 instead of 420 euros. For children aged 6 to 13, the rate will increase from 348 to 390 euros, and from 318 to 357 euros for children up to their 6th birthday.

The citizen's income has replaced the previous basic income support (Hartz IV) since January 2023. The Bundestag had decided to adjust the rates to inflation more quickly than before. Currently, 5.5 million people receive citizen's income. In the view of the NRW consumer advice center, the new regulation still lacks a flat-rate household energy allowance to cushion high electricity prices. This flat rate should be dynamically based on the price of electricity.

Cuts to parental allowance

Couples who have children from April 1, 2024 will have to adjust to lower income limits for the entitlement to parental allowance. In future, only parents who have a taxable income of less than 200,000 euros (previously: 300,000 euros) in the calendar year before the birth of their child will still be able to receive this benefit. One year later - on April 1, 2025 - the income limit is to be reduced again to 175,000 euros. The current limit of 250,000 euros is to be retained for single parents.

Couples will still be able to receive parental allowance together for up to 14 months after the birth of their child from April 1, 2024, but only for a maximum of one month at a time. This regulation will not apply to multiple births. Parents of premature babies are also exempt.

The reform is currently in the parliamentary process and the draft bill has not yet been published.

Higher tax-free allowance for health insurance contributions on company pensions

All company pensions are subject to an allowance on which no health insurance contributions are due. Previously, this was 169.75 euros (West) and 164.50 euros (East) for company pensions for which no contributions were payable. As of January 1, this limit will rise to 176.75 euros (West) and 173.25 euros (East). Contributions will only have to be paid on company pensions above this amount.

To calculate health insurance contributions, the tax-free amount is deducted from a person's combined occupational pensions. The health insurance contribution is only calculated from the remaining amount. The tax-free amount only applies to compulsorily insured pensioners who are insured under the Pensioners' Health Insurance Scheme (KVDR). Pensioners who are voluntarily insured under the statutory health insurance scheme must pay health insurance contributions on their full occupational pension.

Higher amounts for deferred compensation for company pension schemes

Because the general contribution assessment ceiling for pension insurance will rise from 87,600 euros to 90,600 euros per year at the turn of the year, the limits for the amounts exempt from social security contributions and tax in the context of gross deferred compensation will also change. Employees can convert up to four percent of the current contribution assessment limits for social insurance without deducting social security contributions and eight percent without deducting taxes in a direct insurance policy, pension fund or pension fund.

The maximum portion exempt from social security contributions will increase from EUR 292 to EUR 302 per month due to the increase in the contribution assessment ceiling, while the tax-free portion will increase from EUR 584 to EUR 604 per month.

Mini-job limit increases from 520 euros to 538 euros

The monthly earnings limit for mini-jobs - also known as the mini-job limit - will rise from €520 to €538 in 2024. It is dynamic and is based on the minimum wage. As the minimum wage will increase from 12 euros to 12.41 euros next year, the mini-job limit will also rise.

Midijob: lower limit for employment in the transitional sector increases

The lower limit for earnings from jobs in the so-called transitional area will rise from 520.01 euros per month to 538.01 euros next year. The upper limit remains unchanged at €2,000 per month. Employees who regularly earn between €538 and €2,000 are classed as midi-jobbers. If they earn within this transitional range, they pay a reduced contribution to social insurance, which increases until they reach the upper limit of 2000 euros and only then corresponds to the full contribution amount. Pension entitlements are not reduced by the reduced contribution rate. They are calculated on the basis of full earnings.

More money for school supplies

For children, adolescents and young adults who receive citizen's benefit or social assistance, there will be an increase in support for personal school supplies in 2024: An increase of a good 12 percent is planned for the purchase of calculators, fountain pens, crayons or exercise books. The support requirement will then amount to 65 euros for the second half of the 2024 school year (previously 58 euros) and 130 euros at the start of the new 2024 / 2025 school year (previously 116 euros).

The support for personal school needs is part of the education and participation benefits, the so-called education package of the federal government. The amount of the support benefit is determined as part of the Federal Ministry of Social Affairs' ordinance on updating the standard needs levels in the area of social assistance and citizens' allowance.

It also benefits children and young people whose parents receive child supplement or housing benefit. Those who receive benefits under the Asylum Seekers' Benefits Act may also be entitled to the education package.

Minimum wage increases in many sectors

The minimum wage will rise from 12 to 12.41 euros gross per hour on January 1. All employees must be paid at least the minimum wage.

In the case of industry-specific minimum wages laid down in collective agreements, employees in some industries can look forward to an increase right at the beginning or during the course of the year. These include, among others:

Education and training of educational staff current: 17.78 euros; new: 18.58 euros; effective January 2024
Roofing trade current: 14.80 euros; new: 15.60 euros; deadline January 2024
Electrical trade current: 13.40 euros; new: 13.95 euros; deadline January 2024
Building cleaning (interior/maintenance cleaning) current: 13.00 euros; new: 13.50 euros; Date: January 2024
Temporary/temporary work current: 13.00 euros; new: 13.50 euros; deadline: January 2024
Painters/varnishers current: 14.50 euros; new: 15.00 euros; deadline: April 2024
Chimney sweeps current: 14.20 euros; new: 14.50 euros; deadline January 2024

The year 2024 will also bring higher minimum wages for employees in geriatric care. An increase is due on May 1:

Minimum wage for geriatric care (in euros per hour)

Nursing assistants currently: 14.15 euros; May: 15.50 euros
Qualified care assistants currently: 15.25 euros; May: 16.50 euros
Nursing staff current: 18.25 euros; May: 19.50 euros

There is also more vacation for employees in geriatric care: employees with a 5-day week will continue to be entitled to nine days more vacation in 2024 in addition to the statutory vacation entitlement of 20 days.

Minimum wage for trainees also increases

Prospective trainees can also look forward to more money in 2024: anyone who qualifies for the profession of their choice in a trade or business from the calendar year will receive the statutory minimum training allowance of EUR 649 per month in the first year of training (previously: EUR 620 for trainees born in 2023). For the second, third and fourth year of training, there will be increasing surcharges on the amount from the year in which training begins: 18%, 35% and 40% respectively above the starting amount for the first year of training.

The minimum remuneration applies to trainees who are being trained in an occupation regulated by the Vocational Training Act or the Crafts Code. The collective bargaining parties are of course free to set higher training allowances: for example, the collective wage agreement in the building cleaning trade stipulates that trainees receive 900 euros in the first, 1035 euros in the second and 1200 euros in the third year of training (2023: 875, 1010 and 1175 euros).

For trainees in the painting and varnishing trade, a minimum training allowance of 800 (previously: 770) euros in the first, 885 (previously: 850) euros in the second and 1050 (previously: 1015) euros in the third year of training has been agreed for trainees starting on August 1, 2024.

Trainees can demand additional payment from companies that do not pay the respective minimum training allowance or do not pay it on time. In addition, companies face penalties of up to 5000 euros for administrative offenses. The minimum training allowance has been stipulated in the Vocational Training Act since January 1, 2020.

Read also:

The North Rhine-Westphalia Consumer Advice Center also mentions changes in private pension provision.Some consumers might be interested in the Riester pension adjustments.The private pension provision for trainees will be affected as well.Meanwhile, Consumer organizations are urging for increased minimum wage for apprentices in the upcoming year.Parents who are expecting a baby in 2024 should be aware of the changes in the parental allowance income limits.Heating costs will be affected by the new Heating law.The turn of the year brings changes in the tax-free allowance for health insurance contributions in company pensions.Additionally, the amount for deferred compensation for company pension schemes will also increase.The changes in income limits will impact the eligibility for Hartz IV and Child benefit.The minimum wage for apartment workers and other occupations will also increase as part of the reform.Consumer centers across the country can provide advice on how these changes will affect different groups of consumers.*Finally, building savings with capital-forming benefits may become more popular with the increased income limits for the employee savings allowance.

Source: www.ntv.de