German Government Stands Firm On Controversial Relief Bonus Despite Bundesrat Opposition

German Government Stands Firm On Controversial Relief Bonus Despite Bundesrat Opposition

Following the Federal Council’s rejection of the “relief bonus” plan, the federal government is maintaining its commitment to the measure. Deputy government spokesperson Steffen Meyer stated in Berlin on Friday that “further procedural steps will now be clarified”. The government also stated its intention to re-engage in discussions with the individual federal states. Meyer emphasized that the federal government believes it is crucial to alleviate the burden on employees, particularly given the current difficult situation, and remains convinced of the measure’s necessity. When questioned about whether the federal government was surprised by the states’ rejection, Meyer acknowledged that they were aware of the states’ positions following previous discussions.

The coalition consisting of the CDU/CSU and the SPD proposed the bonus to allow employers to pay their employees up to an additional €1,000, tax- and contribution-free, until the end of 2027. However, the Federal Council rejected the plan during its session on Friday, citing fears among the states regarding significant losses in tax revenue. This proposal had previously faced opposition from employers who felt significant pressure and claimed they were unable to afford paying such an additional bonus to their staff.