500-euro bonus and one-time payments: The anti-inflation measures in detail

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The government’s relief package consists of many individual points: One-off payments for pensioners, a 500-euro climate bonus, and an electricity price brake. For those who have lost track, here is a detailed look at all the anti-inflation measures.

Details on the electricity price brake
The entire relief package consists of many individual points. In total, almost 35.2 billion euros will be invested to counteract the effects of inflation and massively increased energy prices in Austria. The first two relief packages were approved at the beginning of the year, the third in June. Now comes the electricity price break, and relief for other heating energy sources is to follow.

All anti-inflation measures in detail
In August, 180 euros were paid out for each child in addition to the family allowance.

In September, 300 euros will be paid to low-income people, such as welfare recipients, the unemployed, and minimum pensioners.
500 euros: climate bonus and cost-of-living bonus
To compensate for the CO2 price, everyone will receive a climate bonus of 250 euros in September, plus a further 250 euros for inflation. This means that all adults living in Austria will receive 500 euros. For each child, another 250 euros will be added. People in the highest tax bracket (50 percent) must pay tax on the cost-of-living bonus and only receive half.

Family bonus to be increased
The family bonus will be increased to 2,000 euros per child or 650 euros for children over 18 as early as 2022. If the family bonus is not taken into account by the employer’s payroll accounting, it must be applied via the employee tax assessment at the beginning of 2023.
At the same time, the so-called additional child amount, i.e., the tax deduction for parents with low incomes, will be increased from 450 to 550 euros. It must be applied via the employee tax assessment at the beginning of 2023.
Up to 500 euros for pensioners
Pensioners will receive a tax- and SV-free one-off payment of up to 500 euros from their pension insurance provider in September 2022. At the same time, the existing deductions for employees and pensioners for 2022 will increase by up to 500 euros (cost-of-living deduction). The cost-of-living deduction must be actively claimed via the employee tax assessment at the beginning of 2023. Retirees entitled to the one-time payment are not entitled to the cost-of-living deduction.
The rule adopted in the 2020/21 Corona crisis that additional allowances and bonus payments of up to EUR 3,000 per employee: in and year are paid out tax-free will be extended to 2022/23.
Abolition of cold progression
Cold progression will be abolished from 2023. This refers to the increase in the tax burden due to the annual inflation adjustment for wages and pensions. Until now, the tax burden has been offset by regular tax reforms. In the future, the tax rate will be adjusted annually. To this end, tax brackets and deductions will be adjusted by 2/3 of the previous year’s inflation. Politicians will decide on the distribution of the remaining third.

Social benefits to be adjusted to CPI
Social benefits such as family allowance, child deduction, childcare allowance, study allowance and rehabilitation, sickness and retraining allowance are to be continuously adjusted to the consumer price index (CPI) from the beginning of 2023.

Non-wage labor costs to be reduced
0.3 percentage points will permanently reduce non-wage labor costs from 2023.
Companies whose energy procurement costs amounted to at least three percent of the production value in 2021 and whose national energy tax amounted to 0.5 percent of the value added in 2021 will be able to apply for a subsidy in 2022.
At the beginning of the year, the green electricity subsidy amount and the green electricity subsidy flat rate were set to zero. This saves each household an average of 90 to 100 euros.

Energy voucher worth 150 euros
All households have received energy cost compensation from a voucher worth 150 euros.
The commuter allowance has been increased by 50 percent, and the commuter euro has been quadrupled until June 30, 2023. There is a one-time negative-taxable amount of 100 euros for negative-tax recipients.

Electricity price break announced.
With the electricity price brake, for all households up to the mark of approximately 2,900 kWh electricity consumption, only ten cents per kWh are charged; only for the consumption beyond the usual market price to be paid. This will result in savings of 400 to 800 euros.

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