People who are unable to work can apply for citizen’s benefit to secure their livelihood. But employees who cannot make ends meet despite working may also be entitled to citizen’s benefit.
The increase in citizens’ benefit on January 1, 2024 has recently caused a lot of discussion and also discontent, because although the traffic light has to save money in the budget and every department is cutting money, the contribution rate for citizens’ money will be increased. However, tougher sanctions have been introduced for those who consistently refuse jobs. Now services can even be canceled completely. But why will there actually be significantly more money for recipients in 2024 and how is the increase calculated?
Citizens’ money: How much is there and what is it made up of?
As of January 1, 2024, citizens’ money rose by twelve percent compared to the previous year. According to the federal government, single adults have since received 563 euros per month, 61 euros more than before.
The federal government argues that citizens’ money is the subsistence level and therefore a fundamental right. If people get into trouble through no fault of their own, for example because they lose their job, then a community of solidarity must not “let these people down.” The fundamental right to guarantee a humane subsistence minimum, which is set out in Article 1 Paragraph 1 of the Basic Law, was developed by the Federal Constitutional Court in connection with the welfare state principle. This is also aimed at those in employment who do not earn enough to live on. According to the Federal Constitutional Court, the amount of citizens’ benefit, the so-called standard requirement, is calculated every year according to a legally established procedure.
According to the federal government, the standard requirement covers the entire subsistence level required for a minimum subsistence level. This includes nutrition, clothing, personal hygiene, household goods and household energy. Furthermore, the so-called socio-cultural subsistence minimum is also included. These are services so that people can participate to a minimum in social, cultural and political life. The job centers pay recipients their standard requirements on a monthly basis. How they use the money is up to them.
In addition, there are so-called additional requirements. These go beyond the standard requirements and are intended for special situations, such as single parents, pregnant women or people with disabilities. Likewise, needs for accommodation and heating are not part of the standard needs.
Citizens’ money: How is the standard requirement determined?
Every five years, a so-called income and consumption sample (EVS) is carried out by the Federal Statistical Office and shows what people in Germany spend their money on. Around 80,000 households of all income classes are surveyed. These provide information about income, assets and expenses.
The Federal Ministry of Labor and Social Affairs then carries out a “special evaluation” that primarily takes into account the expenses of people with low incomes. This then forms the basis for the expenditure required for standard requirements.
The increase in citizen’s money in 2024 refers to the results of the sample from 2018. The last EVS took place in 2023. The federal government expects these results to be available in 2025.
So that the increased cost of living can be taken into account regularly, the standard requirements are always updated until the next EVS results on January 1st of each year. This happens in two steps:
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Step: First, the “basic update” is calculated using a mixed index. This consists of 70 percent of the price development, which is important for standard requirements, and 30 percent of the average development of net salaries and wages. The development is measured in two time periods, which are then compared with each other. For the calculation of the standard requirements as of January 1, 2024, these were the periods from July 2021 to June 2022 and from July 2022 to June 2023.
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Step: The current price development is then taken into account through a “supplementary update”. For 2024, the prices relevant to standard requirements were determined in the period from April 1 to June 30, 2023 and compared with the corresponding three-month period of 2022.
Citizens’ allowance increase in 2024: Why is there significantly more money?
The federal government admits that the standard requirements as of January 1, 2024 are “comparatively high”. The reason is the development of prices for goods and services, which are taken into account in the amount of citizens’ money.
Furthermore, the prices for food in particular have risen and so the “price index relevant to standard needs has increased more than the general consumer price index”, which includes significantly more goods. If food prices fall again in the future, the federal government assumes that the increase in citizens’ money will probably be smaller again.
