576 Euro more: Bürgergeld and Kinderzuschlag reform
Germany is preparing the biggest restructuring of its welfare system in decades, and a new study puts numbers on what it could mean for household budgets.
The Federal Ministry of Labour and Social Affairs is working on merging several separate payments into a single system. Grundsicherung, the payment formerly known as Bürgergeld, would be combined with the child supplement (Kinderzuschlag) and housing benefit (Wohngeld) into one benefit with one application route. At present each is administered separately, with its own forms, its own office and its own rules.
A study commissioned by the workers' welfare association AWO and carried out by the ifo Institute modelled what that would deliver. An average household would gain about 149 euros a year. Couples with three or more children would gain 576 euros. Households in the bottom ten to twenty percent of the income scale would gain 515 euros. The researchers estimate the poverty risk rate across Germany would fall by 0.9 percentage points, and child poverty by a full percentage point. They also calculate that 322,000 people currently out of work could move into employment, because simpler rules remove the points where extra earnings are clawed back. The additional cost to the state is put at 5.36 billion euros.
The finding that matters most to anyone unsure of their entitlements is a different one. The study concludes that the largest gains would go to people who are entitled to support now but never claim it, because the process overwhelms them, because they do not know the payment exists, or because they are ashamed to ask. That describes a great many households where German is not the first language, and where the difference between three separate offices and one is the difference between claiming and not claiming.
Nothing has been decided. No draft law has been published and no start date has been set. What exists is a ministry working on the merger and a costed study of one version of it. Anyone currently receiving Grundsicherung, Kinderzuschlag or Wohngeld should keep applying under the existing rules until a change is formally announced.