It was the biggest joint compromise that employers, unions and the federal government were able to reach as part of the “concerted action” in autumn 2022: Companies should be allowed to pay their employees a one-off payment of up to 3,000 euros, tax- and social security-free, in order to cushion the high inflation somewhat. The special payment can be transferred as a one-off payment or in installments from October 2022 until the end of this year.
Almost half of employees in Germany received such inflation compensation last year. This is the result of a YouGov survey commissioned by Teambank.
Almost one in five employees who benefited from the bonus reacted cautiously: According to YouGov, 21 percent of those who benefited answered no when asked whether they had “noticeably more money at their disposal.” For more than one in four, however, the payment had a positive effect. Households with higher incomes in particular benefited. More than two thirds of employees who have a net monthly income of more than 4,000 euros said they received the bonus. In contrast, only 30 percent of households with a net income of less than 2,000 euros benefited.
“The problem is that those who are particularly hard hit by inflation have the least protection and disproportionately often do not benefit from such special payments at all,” criticises Marcel Fratzscher, President of the German Institute for Economic Research (DIW).
People with lower incomes often have two to three times higher individual inflation because they spend a higher proportion of their low income on costs such as food and energy – which have risen particularly. “On the one hand, this affects people with low incomes. And on the other hand, it also affects many people who have little money and do not work: pensioners or students, for example,” Fratzscher told WELT. The latter did receive a bonus, but the amounts were comparatively small.
“The inflation premium is an instrument that has been implemented by politicians very quickly and without red tape,” praises Fratzscher. It has the clever component that the state does not pay for everything, but merely loses tax revenue through the tax exemption.
“From a bureaucratic point of view, the state should have said: we will also transfer a one-off payment to low-income citizens,” says Fratzscher. However, the fact that it is very difficult to transfer money in a lump sum and precisely is now evident in the climate money – the processing of the payment is still unclear.
DGB board member Stefan Körzell stressed that the bonus helped to cushion the enormous inflation shock of recent years. “The bonus was achieved primarily through collective bargaining. Employees in the low-wage sector often work without a collective agreement and therefore probably benefit less from this special payment,” said Körzell. It is important that more companies conclude collective agreements again.
“Where the unions have agreed on inflation compensation premiums in collective bargaining, these special payments apply to all employees – regardless of their income level.” The inflation compensation premium was an instrument for the acute crisis situation. “In the future, it will be important to permanently stabilize wage developments through collective bargaining,” said Körzell. “In view of the economic situation, strengthening purchasing power is urgently needed.”
A look at a second study reveals how socially unjust the effect of the inflation premium apparently was. Economists at the German Economic Institute (IW) have investigated which groups of employees have received an inflation compensation premium since October 2022. The data is available exclusively to WELT.
The breakdown by salary level is notable in the results. It shows that employees with a gross salary of 4,000 to 5,000 euros were the most likely to receive a payment from their employer, with a share of over 60 percent. Among employees earning less than 1,000 euros, however, only one in four received a payment.
It also shows that employees covered by collective agreements received the bonus much more frequently. Four out of five of these employees were able to benefit from it; on average they received just under 2,200 euros. Overall, however, less than half of Germans work with a collective agreement, and loyalty has been declining sharply for several years. According to the IW, only around 35 percent of employees without a collective agreement received a bonus, and the value is also slightly lower at 2,090 euros. “In addition, small companies, where wages are often lower, pay the bonus less often than large companies,” says study author Tobias Hentze.
According to the data, a total of almost 20 million employees received a bonus, i.e. less than one in two. On average, the amount paid out was around 2,150 euros. Companies can still pay out the bonus until the end of the year or increase it up to a maximum of 3,000 euros.
The one-off payment was also expensive for the state, as the study authors Martin Beznoska and Tobias Hentze write. This means that the state is foregoing revenues of an estimated 25 billion euros, of which 13 billion euros are for social security contributions from employees and employers and 12 billion euros are for income tax – although these would not have been incurred if the one-off payment had not been made.
