Amid concerns about the 2025 German budget plan, FDP parliamentary leader Christian Dürr has said that the Bürgergeld unemployment benefit should be frozen to make savings.
FDP parliamentary leader Christian Dürr has said that Bürgergeld (citizens’ allowance) unemployment payments should not increase in 2025.
Bürgergeld is a basic subsistence benefit separate from Germany’s main unemployment benefit (Arbeitslosengeld). People who work in Germany and pay social security insurance are entitled to Bürgergeld if they are in long-term unemployment or need the subsidy to supplement low-paid work.
Since January 2024, the monthly Bürgergeld payment for single people is 563 euros, a 12 percent increase on 2023 rates to compensate for rising living costs in Germany.
“My proposal would be a downward adjustment because the last calculation estimated inflation to be higher than it actually was. This would both relieve taxpayers of up to 850 million euros and increase incentives to work,” Dürr told the Bild tabloid.
According to the German Labour Ministry, the country could see a 0 percent inflation rise in 2025. Whether the coalition eventually decides to cut Bürgergeld accordingly or not, the monthly amount paid out to Bürgergeld recipients must guarantee the fundamental right to a decent subsistence to comply with the German constitution (Grundgesetz).
After a weeks-long struggle, Germany’s traffic light coalition partners finally reached an agreement and announced the 2025 budget plan in early July. Disagreements between coalition leaders Christian Lindner (FDP), Olaf Scholz (SPD) and Robert Habeck (Greens) were cited as a main sticking point.
Upcoming budgetary changes include introducing further financial sanctions for Bürgergeld recipients, changes to tax rates, halving integration course funding and upping defence spending.
But one month after agreeing on the budget, the coalition is at loggerheads again. Experts in the Finance Ministry have concluded that the 2025 budget may be unconstitutional. A plan to reallocate 2022 funds left over from the gas price cap has been found faulty, and the coalition must now find alternative ways to fill a 5-billion-euro hole in the budget.
The coalition found itself in a similar pickle in late 2023 and there is a feeling of déjà vu. To fund the 2024 budget, Scholz, Lindner and Habeck planned to redistribute 60 billion euros left from emergency policies to tackle coronavirus and use it to fund the “climate transformation fund” (KTF), but German constitutional court in Baden-Württemberg ruled the plan illegal, sending the coalition into crisis shortly before Christmas.
This time, the budgetary hole is much smaller - five billion euros rather than 17 billion - but the coalition must return to the drawing board to avoid another unwelcome ruling from Baden-Württemberg as the new year looms.
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