Energy Costs Outpace Basic Income Benefits in Germany
Economy / Finance

Energy Costs Outpace Basic Income Benefits in Germany

A recent calculation by comparison portal Verivox indicates that the electricity allowance within Germany’s citizen’s allowance (Bürgergeld) system may remain insufficient to cover average costs in the coming year. The calculation, reported by newspapers of the Funke-Mediengruppe, reveals an estimated shortfall of approximately €56 per year for individuals living alone.

While this represents a decrease from previous years – €74 in 2025 and €129 in 2024 – Verivox recommends exploring alternative electricity providers to mitigate the deficit and potentially achieve further savings.

The German cabinet recently approved a regulation freezing the standard rates for monthly living expenses through 2026. More than five million people in Germany currently receive citizen’s allowance.

For a single adult, the monthly allowance remains at €563, including a calculated €45.70 for electricity expenses. Individuals whose actual electricity costs exceed this amount are responsible for covering the difference.

According to Verivox’s calculations, the average electricity cost for a single-person household with an annual consumption of 1,500 kilowatt-hours is €50.33 per month, approximately ten percent higher than the allowance included in the citizen’s allowance.

Significant regional disparities exist, with Hamburg residents facing average monthly costs of €57.93 – roughly 27 percent higher than the allowance. This results in an estimated annual shortfall of €147.

The Saarland (€101), Baden-Württemberg (€98) and North Rhine-Westphalia (€80) also exhibit substantial differences between actual costs and the allowance. Conversely, Brandenburg, Saxony and Saxony-Anhalt experience comparatively smaller shortfalls (€9, €14 and €18 respectively). Bremen is an exception, where annual electricity costs are €16 below the allowance. Electricity costs vary regionally and are influenced by factors like grid fees, concession charges, market competition and population density.

However, favorable new customer tariffs render the shortfall negligible. These tariffs currently cost single-person households an average of €40.48 per month nationwide, reducing annual expenses by €64 compared to the allowance.

“A comparison is particularly worthwhile for those who obtain electricity from expensive basic supply tariffs” stated Thorsten Storck, energy expert at Verivox. “By regularly switching providers, those receiving citizen’s allowance can potentially undercut the allowance’s electricity allowance and save money in the process.

Job centers do not separately cover electricity costs within the citizen’s allowance; instead, these expenses are integrated into the monthly standard rate and must be paid directly. The citizen’s allowance calculation is based on the Income and Consumption Sample (EVS). Verivox’s calculation used a standard amount of €35.30 for electricity based on the EVS for single individuals, adjusted to €45.70 for 2026 due to price increases.