New child bonus, rent subsidy reform, higher Hartz-IV social benefit payments translate into clearly increased earnings for families in particular

Under the welfare state principle, private households in Germany receive numerous transfer payments for support in various life situations. In recent months there have been increases in benefits for a large number of these transfers, and changes in the tax burden have also taken effect. As a result many households have received considerable increases in income. This article examines and comments on some of the details as well as the effects of the individual measures on the disposable household incomes for selected family types in dependence on gross income. The almost simultaneous improvements in various social benefits that took effect in recent months have clearly boosted the incomes of families in particular. All employees also received reductions in the income tax as well as the social insurance tax for those whose incomes are below the limit up to which contributions are payable. Since consumer prices have not risen in comparison to 2008, this means a noticeably higher purchasing power for private households. Also for this reason private consumption has been a boost to the economy in the current crisis.