31 Aug 2020, 13:17
David Reay

State electricity payments to unemployed won’t cover bills in 2021 - report

Clean Energy Wire

Electricity payments provided as part of Germany’s basic unemployment benefit will leave recipient households out of pocket by up to 197 euros next year, price comparison website Verivox said in a press release. The contribution of 35.30 euros a month in 2021, part of the so-called Hartz IV benefit of 439 euros per month for a single person, will not suffice, said Verivox. The average Hartz IV single household using 1,500 kilowatt hours per year racks up a bill of 43.17 euros per month, 22 percent more than the payment, the comparison portal calculated. In one state, Schleswig-Holstein, the average cost for a lone recipient with a basic tariff power contract (the so-called Grundversorgung) is 51.75 euros, a surfeit of 197 euros per year. Electricity in basic tariff contracts with the main local utility usually cost more than comparable contracts with other suppliers.

The difference between Hartz IV electricity payments and annual electricity costs keeps rising year on year, according to Verivox. In 2019, the average deficit for single households with a basic tariff contract was 101 euros, in 2020 115 euros and in 2021 it will be 161 euros. While the total Hartz IV payment has risen by 27 percent since the benefit was introduced in 2005, electricity prices have risen by 61 percent on average.

While Germany’s energy transition remains popular among its citizens, there are concerns about rising electricity costs. A study has shown that lower-income households face a higher burden of costs as they must set aside a higher proportion of income to cover their bill. While cheaper tariffs are available, some low-income households have difficulties to change power suppliers because of their low credit rating. Government has annually increased Hartz IV electricity payments, and utilities and social organisations have provided help to low-income groups.

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