Andelsblatt: Chancellor Soltz plans ‘inflation allowance’ to relieve workers

To mitigate the effects of high inflation, Chancellor Olaf Solz (SPD) wants to propose a lump sum payment from employers without taxes and contributions. According to Handelsblatt, this was discussed on Thursday between SPD economic policy officials from the federal government and the states. A representative of the Chancellery’s Office was also present at the meeting.

Government circles have been told that the special payment should be modeled on the recently increased coronavirus tax-free allowance. According to this, the allowance paid by employers to their employees due to the pandemic is tax-free up to 1,500 euros. A similar regulation could now be introduced in view of rising energy costs and high inflation, it said. The newspaper “Bild am Sonntag” was the first to mention Scholz’s proposal.

According to government circles, the cost will be tolerable for the public treasury. At the same time, it would be an incentive for employers and unions to rely on lump sum payments instead of permanent pay rises. This could help address the feared spiraling rise in wages and prices.

Soltz had already hinted at an inflation boost in early June when he announced he would discuss joint anti-inflation measures with unions and employers as part of a “coordinated action” on July 4th.

Earlier, in his speech to the Bundestag, the chancellor praised the parties negotiating their prudent wage policy so far. He referred to the collective agreements in the field of chemicals, which chose an “interesting way” with a one-time special payment for employees. “The chancellor is not stressing this out by chance,” government sources said.