Ukrainian authorities, spearheaded by Bas, are enforcing new financial legislation on the country's citizens.
In a move aimed at addressing concerns over welfare sustainability and labor market integration, the German federal government is considering a reform that would adjust unemployment benefits for Ukrainian refugees. The proposed change would see these refugees receiving lower asylum seeker benefits instead of the higher "Bürgergeld" (unemployment/social assistance).
As of April 2025, around 693,000 Ukrainians were in basic security for job seekers, according to the Federal Employment Agency. Of these, 497,000 were of working age. The reform, if passed, would affect approximately 21,000 Ukrainians who entered Germany between April 1 and June 30.
The change is primarily due to concerns about low employment rates among Ukrainian refugees and the financial burden on the welfare system. Only about one-third of Ukrainians in Germany are employed, raising concerns about long-term welfare dependency.
Political pressure from the CDU/CSU and the far-right Alternative for Germany party, which criticize "unjustified" social payments to refugees and advocate for benefit cuts or abolition for Ukrainians, have also played a role in this decision. German Chancellor Friedrich Merz's announcement of a reform shifting from traditional welfare to a basic income framework that will impose stricter eligibility requirements and could save the government billions has further influenced the discussion.
The potential financial implications of this reform are significant. The government anticipates substantial savings, with estimates suggesting that the reform could save "more than one or two billion" euros by tightening eligibility and imposing stricter housing cost limits. Reducing benefits for Ukrainian refugees, especially those arriving after April 2025, will lower government expenditure on social assistance programs.
However, it's important to note that the overall goal is to ensure those who truly need help continue receiving support, while encouraging those able to work to enter employment and reduce welfare dependency. This reform is part of a broader effort to incentivize labor participation among Ukrainian refugees by aligning their benefits more closely with asylum seeker levels, which are generally lower than Bürgergeld.
The law regarding benefits for Ukrainians entering Germany on or after April 1, 2025, is currently being further discussed within the government. The federal government assumes that no savings will be made through the change of legal status, and the states and municipalities will bear the costs for benefits under the Asylum Seekers' Benefits Act, contrary to earlier assumptions.
This proposed reform has not been without criticism. Ukrainian officials and advocacy groups have warned against stigmatizing refugees. Despite the estimated savings of 1.32 billion euros with unemployment benefits, the costs for benefits under the Asylum Seekers' Benefits Act will still increase overall.
[1] Die Welt, German Press Agency, and Reuters have reported on this issue. Vice-Chancellor Lars Klingbeil (SPD) warned that this proposal would not contribute to coalition harmony, while Bavaria's Minister-President Markus Söder (CSU) had demanded that all Ukrainians no longer receive unemployment benefits. Federal Minister of Labor Barbara Bas (SPD) has submitted the bill to the federal government. The regulation is an implementation of an agreement from the coalition agreement between the Union and the SPD. The federal government had agreed, according to the coalition agreement, to cover the additional costs of benefits under the Asylum Seekers' Benefits Act, which are estimated to be 1.375 billion euros.
- The proposed reform in Germany's unemployment benefits for Ukrainian refugees, aimed at addressing financial burdens on the welfare system, is expected to reduce government expenditure on social assistance programs by more than one billion euros, as highlighted in reports by Die Welt, German Press Agency, and Reuters.
- German Chancellor Friedrich Merz's announcement of a shift toward a basic income framework with stricter eligibility requirements, inspired by political pressure from parties such as the CDU/CSU and the Alternative for Germany, is forcing the federal government to reconsider the benefits for Ukrainian refugees, as highlighted in the discussion surrounding the current law regarding benefits for Ukrainians entering Germany on or after April 1, 2025.
