Increased social aid expenditure projected by nearly 15% in 2024
Germany Sees Significant Increase in Social Assistance Expenditures in 2024
In 2024, Germany witnessed a substantial rise in social assistance expenditures, with a significant portion of the increase allocated to basic income support, particularly under the twelfth book of the Social Code (SGB XII) and the ninth book of the Social Code (SGB IX).
The State spent 14.8% more on these basic income support and nursing care subsidies compared to the previous year, totalling €20.2 billion. The largest portion, €11.4 billion, was for basic income support primarily for pensioners and those unable to work.
Focus on SGB XII and SGB IX
SGB XII, which governs social assistance, covers basic income support for people unable to work or pensioners who do not have enough income. This is a substantial part of the increased expenditures. SGB IX focuses on services for the participation and rehabilitation of disabled persons, contributing to the broader growing social welfare budget.
Controversy over Unemployment Benefits
Unemployment benefits, especially the Bürgergeld scheme—a citizen’s stipend replacing previous Hartz IV benefits—are a major portion of social spending but are politically contentious. The government is planning to reform Bürgergeld, notably cutting housing support for recipients amid rising rents. This planned reduction-in-housing-support element is intended to save billions but faces opposition, as it affects the poorest households.
CDU politicians have framed the debate around alleged "luxury rents" for welfare recipients, stirring controversy. Chancellor Friedrich Merz has openly stated that the current welfare state model is no longer financially sustainable, calling for fundamental reforms and tough decisions amid soaring expenditures and demographic challenges.
Fraud and Non-Compliance
There is also controversy within the government coalition regarding unemployment benefits and the need for stricter measures against non-compliance. Dirk Wiese, the parliamentary business manager of the SPD parliamentary group, has stated that "massive fraud or black work - like in the Ruhr area - must not be tolerated."
Additional Context
Overall social welfare spending hit a record high of roughly €47 billion in 2024, combining different welfare benefits including basic income and unemployment assistance. Demographic shifts with an aging population are increasing pension, health, and care costs, straining the budget and underscoring the pressure on social systems.
In summary, increased social assistance expenditures in 2024 concentrate heavily on basic income support under SGB XII for pensioners and the disabled, with SGB IX-related services also included. Unemployment benefits (Bürgergeld) represent a substantial and controversial share, with planned reforms aiming to reduce costs by cutting housing support, sparking political and social debate about the future sustainability and fairness of Germany’s social welfare system.
Vocational training may become a crucial aspect of the community policy to tackle rising social assistance expenditures in the future, as investing in job skills could reduce the need for basic income support under SGB XII and IX.
In the current political climate, discussions surrounding the reform of unemployment benefits, such as Bürgergeld, and stricter measures against non-compliance, are influenced by the pressing need to manage finance in the business and politics realm in light of general-news issues like soaring social welfare spending and demographic challenges.
