The Federal Council (Bundesrat) has rejected the “relief premium” of €1,000, which was recently approved by the Bundestag. At the Council of States session on Friday, the measure failed to gain the required majority, meaning it cannot temporarily come into effect.
This proposed bonus would have allowed employers to pay their employees a tax- and contribution-free dividend of up to €1,000 until June 30, 2027. Crucially, this payment would be supplementary to the regular wages already owed.
The premium is part of a larger package of measures introduced by the federal government in response to the financial strains faced by citizens due to the conflict in Iran. This package also included the “fuel subsidy” which the Federal Council had previously approved during a special session at the end of April.
Furthermore, the states highlighted that the “relief premium” would lead to projected tax losses estimated at €2.8 billion. According to current assessments, these tax shortfalls would have to be borne by nearly two-thirds of state and municipal budgets, without any plans for counter-financing or other form of compensation.
