German cabinet agrees to replace Bürgergeld with Neue Grundsicherung

Members of the German cabinet have agreed to scrap the Bürgergeld long-term unemployment benefit and replace the payment with “Neue Grundsicherung”. The change still needs to be approved by the Bundestag.

German cabinet agrees to scrap Bürgergeld

Members of Germany’s CDU/CSU-SPD cabinet have agreed to scrap the Bürgergeld long-term unemployment benefit and replace it with a new benefit, “Neue Grundsicherung” (new basic support).

Bürgergeld (also known as citizens’ allowance) was introduced by the SPD-Greens-FDP coalition in 2022 and replaced the infamously strict Hartz IV benefit. It is a basic subsistence benefit separate from Germany’s main unemployment benefit (Arbeitslosengeld). 

In November 2025, around 5,2 million people in Germany were dependent on Bürgergeld, including 1,4 million children aged 15 or younger. In 2025, single Bürgergeld recipients receive a monthly payment of 563 euros. Bürgergeld recipients who have children receive an additional payment of between 357 and 471 euros per child, depending on the child’s age.

Now that the cabinet has agreed on the change, the law faces a vote in the Bundestag. If it passes, it will apply from July 1, 2026.

Which changes will come with Neue Grundsicherung?

Despite inflation, one crucial thing will remain the same with the introduction of Neue Grundsicherung: the monthly amount which claimants receive.

The government’s general intention of scrapping Bürgergeld in favour of Neue Grundsicherung is to limit the number of people who claim long-term unemployment benefits.

As a result, the requirements for claiming Neue Grundsicherung will be higher than for claiming Bürgergeld, and those who are deemed not to be complying with the rules of claiming Neue Grundsicherung will face tougher sanctions.

There will be greater expectations on Neue Grundsicherung claimants to attend appointments at the Jobcentre, and those who miss two appointments face having their support money cut by 30 percent. 

Recipients who miss a third appointment will face a “hearing” with the Jobcentre. The “hearing” will take place over the phone or Jobcentre employees will visit the claimant at their home, during which they will have to explain why they have missed their appointments. 

If Jobcentre employees consider the claimant’s explanation unjustified, or the Jobcentre cannot contact the claimant, they could have their support money cut entirely, including any support money they rely on to pay their rent or utilities.

The draft law protects certain people from these tougher sanctions, for example, those with diagnosed mental illnesses. Recipients who reject a job offer may have their unemployment benefit cut, but not their support money for rent or utilities.

Currently, people can still claim Bürgergeld if they have assets, including cash, savings, savings bonds, securities, items like vehicles or jewellery, endowment insurance or real estate. 

For the first 12 months of claiming Bürgergeld, these assets are only taken into account if they are “substantial” (worth more than 40.000 euros for a single person, plus 15.000 euros for each additional household member).

With the introduction of Neue Grundsicherung, this grace period, which protects Bürgergeld claimants’ assets, will be scrapped entirely. 

Social organisations criticise benefit sanctions

Announcing the cabinet’s decision, Chancellor Friedrich Merz (CDU) said that “No one in Germany will become homeless [as a result of the changes]”, but that “[T]hose who do not cooperate at all, who do not even report to the Jobcentre, we must assume they don’t need the help...”.

Criticism has been widespread from social welfare associations in Germany. According to a report from Tagesschau, CEO of the Paritätischer Gesamtverband (Parity Association), Joachim Rock, said the planned sanctions will “severely impact the minimum subsistence level, pose a particular threat to disadvantaged groups”.

Michael Groß, president of the AWO (Workers’ Welfare Association) said the government was “putting a lot of energy into imposing harsher sanctions on people in need”. 

Representatives from Diakonie Deutschland said politicians should focus on how to “equip Jobcentres so that they can help people find long-term work through good and effective counselling, support, and placement”.