While the €300 bonus will be paid to people through their wages, those on social benefits will also receive a top-up of €100. Families who receive child support benefits will also see a one-off payment of €100 per child.
A proposal by one member of the coalition, the business-friendly Free Democrats (FDP), to subsidize fuel for consumers when filling up their vehicles at gas stations, was rejected by the other coalition partners, the Social Democrats (SPD) and the Greens.
The agreed proposals announced on Thursday were the result of talks that went on late into the night on Wednesday.
Finance Minister Christian Lindner, from the FDP, said the measures were aimed at achieving energy independence and efficiency as well as supporting citizens facing the effects of Russia's war in Ukraine.
"This should show the people of this country that we can be trusted to act in this crisis," he said.
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Support for private cars and public transport
The tax on fuel for vehicles will be reduced, by 30 cents per liter for gasoline and 14 cents per liter for diesel.
"We don't want to abandon those who rely on their cars: commuters, families and tradespeople, to the rising fuel prices," Lindner said.
The government will also provide the funds to regional public transport organizations "so that the states can organize" the subsidies to monthly tickets, Green party co-leader Ricarda Lang said.
She underlined the focus to invest "massively in public transport" to make it "cheaper" than ever before, even if only as a temporary measure.