Germany’s welfare overhaul could leave millions facing benefit cuts

Germany’s new government has replaced the Bürgergeld citizens’ income benefit with a new basic income support scheme as part of a broader overhaul of the country’s welfare system.

The Bürgergeld benefit had been in force since 2023, replacing the previous Unemployment Benefit II. According to junge Welt (jW), the latest changes effectively mark the return of the “Hartz IV regime” introduced under former Chancellor Gerhard Schröder in 2005.

Federal Labour Minister Bärbel Bas of the SPD on Wednesday described the reforms as “a strong signal against the abuse of social benefits.”

Steffen Kampeter, head of the Confederation of German Employers’ Associations, backed the move and called for the “consistent enforcement of stricter cooperation obligations.”

Officials at Bas’s ministry are currently drafting legislation governing how the new basic income support will be calculated. The process is referred to as the “standard needs assessment.”

The shift from Bürgergeld to the new basic income support represents more than a change in name. The central principle is that securing employment takes priority. If low-paid jobs are available and deemed “reasonable,” job seekers registered with employment agencies will be required to accept them. Failure to do so will result in benefit reductions.

According to the Federal Employment Agency (BA), the reform’s primary objective remains placing people into long-term employment, while vocational training and continuing education are given secondary importance.

Bas has likewise described the policy as one that “promotes employment rather than benefit dependency,” adding: “Everyone who is able to work must make an effort to find a job.”

According to a statement published on Wednesday by the organization Sanktionsfrei, that characterization does not reflect reality. Of the roughly 5.5 million people receiving basic income support, nearly two million are children and young people. At least 800,000 recipients are already working but must supplement their income because of low wages.

In addition, more than one million benefit recipients are unable to participate in the labor market because they care for relatives, look after children, are in education or are ill.

The share of recipients who “completely refuse” to seek work is negligible. Even the Federal Employment Agency’s Institute for Employment Research identified only around 100 such cases last year.

The federal government also plans to reduce housing benefits. Joachim Rock, managing director of the Paritätischer Gesamtverband, said on Wednesday that the move would push recipients of both basic income support and housing assistance further into poverty.

Older people and families would be particularly affected. At the same time, the governing coalition has pledged to eliminate homelessness by 2030.

Ines Schwerdtner, co-chair of Germany’s Left Party, argues that abolishing the standard benefit entirely would violate fundamental rights and is considering filing a constitutional complaint against the reforms with the Federal Constitutional Court.