The Government extends the additional discounts of the social bonus until June 2025 and prohibits supply cuts until the end of the year

The first vice president and Minister of Finance, Maria Jesus Monterohas revealed from the Moncloa press room what will happen with some energy aid that in recent years has helped the most vulnerable households to pay the electricity bills. If a new extension had not been approved this Tuesday, they would have expired next Sunday, June 30.

Instead, the additional discount of the electric bonus will continue for another year, until June 30, 2025, so that vulnerable households will continue to have a 40% reduction on your bill, instead of 25% under ordinary conditions, and 80% and not 65% in the case of households considered “severe vulnerable”.

Also extended, in this case, until December 31, 2024, is the prohibition on cutting off electricity, gas and water supplies due to non-payment, a measure that comes from the Covid health emergency. Specifically, it has approved a “extension until the end of 2024 of the guarantee of water and energy supply to vulnerable consumers”, as reported by the Government.

Also in energy matters and despite the fact that it has been one of the aids created in the energy crisis of 2022 that has had the least reception among the population, the Government has decided to make permanent the regulated gas tariff (TUR) that was created specifically for the neighboring communities. To contract the so-called TUR4, the neighborhood communities had to commit to having the boilers ready for maintenance and install individual gas meters in exchange for discounts of between 30 and 40% of the cost of heating. Now, Montero explained, “indefinite character is granted” to a gas rate that would otherwise also have expired next Sunday.

End aid for impoverished households

With the decree approved this Tuesday, the Government has allocated aid worth 30,000 million, of which 25,000 have been allocated to families, Montero said. Just as it has assured that it will “accompany” families and the productive fabric “for as long as necessary”, the Government has nevertheless continued its path of withdrawing aid, as requested by Brussels, in a rule that must still pass through Congress. and that drops other measures, such as the special aid that it approved in October 2022 for working households that, Without entering the vulnerable category, they would have been at risk of social exclusion due to rising inflation and the energy price crisis.

For them, an electricity bonus was tested that would reduce the electricity bill by 40% for homes that, depending on the number of members and minors in them, should not exceed the 28,000 euros per year of incomewhich will expire this Sunday because the Government has not extended it.

energy VAT

On the other hand, the 10% VAT reduction for products is not maintained either. pellets from biomass and wood for firewood and next Monday, July 1, they will return to pay taxes at the ordinary rate of 21% within the progressive reversal of the exceptional measures that the Government introduced in 2022 in the field of energy and for which last April also VAT on gas was ‘normalised’ at a rate of 21% compared to the 10% with which the year had started and the 5% at which it was taxed in 2023.

Also in the absence of an extension, on July 1 it will also return to its ordinary rate of 5.1%. Special Tax on Electricity, which is paid by households and small businesses -with a contracted power of less than 10kw-. It started 2024 at the exceptionally reduced rate of 2.5%, rose to 3.8% in April and after June 30 it will return to the ordinary rate of 5.1%.

On the contrary, between now and the end of this year it is still foreseeable that there will be movements regarding VAT on electricity. It started in January, going from the super-reduced rate of 5% to 10%, to remain that way until December 31 before moving to 21% in 2025, but as long as the price of electricity did not fall in the wholesale market. below 45 euros/MWh. This is what happened in February, so the VAT went from 10 to 21% ahead of time and for this In the month of July, the opposite could happen, that VAT will go down again to 10% because the June average is expected to exceed the 45 euros marked as the threshold. The average of the first 26 days currently remains at 53.9 euros /Mwh.