German social benefits: does it make sense to work at all – Europe

According to some media, the benefits in Germany are so high that they do not stimulate the search for work, but on the contrary – they make people who receive social payments take their time to find employment. Deutsche Welle explains what are the reasons.

As it became clear these days, the German government made mistakes in the calculations related to the financing of social benefits: the money to pay the so-called Bürgergeld suddenly ran out. It turned out that there is a shortfall of 3.25 billion euros. In the end, the rulers found a way to fill the “hole”. But the question of the cause remains: how did this financial deficit in social benefits come about?

It is important to note that for the year 2024, Germany will allocate an additional 4.8 billion euros to the financing of the social payment system. Aid will be increased significantly – by about 12%. Mostly because of high inflation. This decision requires a serious increase in the budget deficit planned for next year. In other words, the government will have to borrow even more.

Next year, single people without children will no longer receive 502 euros per month, as before, but 563 euros. There is also an increase in families with two adults and children – adults will receive 506 euros per person instead of the previous 451 euros per month. And children up to seven years old will now be paid 357 euros per month, up to 14 years old – 390 euros, and children under 18 years old – 471 euros.

Why does Germany need so much money for welfare?

The resulting deficit and the further multibillion-dollar increase in “burgergeld” funds caused a heated political debate in the country. The key question arose: why did the government of Social Democrat Chancellor Olaf Scholz, so proud of this new system that replaced the unloved Hartz IV, miscalculate so badly?

Labor Minister Hubertus Heil of the Social Democrats said there were three main reasons for the deficit. First of all, these are the high inflation and the increase in the prices of energy carriers, which is why heating costs have increased.

In second place comes the absence of economic growth and even a certain decline in GDP, which makes it difficult for the unemployed to look for work.

But thirdly, Heil pointed to the large number of Ukrainian citizens who came to Germany seeking refuge from the war.

According to the government’s decision, they did not receive the status of refugees, but the status of recipients of “burgergeld”, which implies the granting of larger sums and more rights. For example, they do not need a work permit – they automatically receive such a right. The government assumed that many of the Ukrainian women – since 80% of the working-age arrivals were women – would quickly find work after completing the relevant language courses. Especially since most of them have higher education.

And indeed – some Ukrainian women quickly started working. But their number was much lower than expected. This prompted the Minister of Labor to announce in mid-October that the policy towards Ukrainian citizens of working age would be changed. In the future, they will be required to look for a job more persistently and accept even one that does not correspond to their higher qualification. “We want people to go from the language course to the workplace faster, and we will achieve this goal,” said the minister.

The system does not stimulate the search for work?

The discussion in the German media in recent days, however, revolves not so much around the Ukrainians, but around the social assistance system itself. According to some, the benefits are so high that they do not stimulate the search for work, on the contrary – they make people who receive social payments take their time to find employment.

Both media commentators and opposition figures have leveled precisely this kind of criticism, demanding that the system be changed to create more incentives for employment. According to the Kölner Schat-Anzeiger newspaper, for example, the main problem is the lack of a mechanism to ensure that full-time workers will actually have more funds at the end of the month than those who rely on state benefits. The difference must be so great that even those whose work is not well paid will not even think about transferring to social benefits, the publication urges. It notes that the government did not take this fact into account when creating the new welfare payments system.

Migrants receive a significant portion of the benefits

“Bürgergeld (translated: money for citizens) is increasingly turning into money for migrants,” claims the magazine “Focus”. It cites data from the Federal Labor Agency, according to which 2.9 million German citizens and 2.6 million foreigners received social benefits this summer, including 480,000 Ukrainians.

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