The Federal Ministry of Labor under Hubertus Heil (SPD) defends the financial planning for the citizen’s allowance next year. The “Bild” newspaper reported, citing documents from the ministry, that the ministry expects expenditure for next year to be 9.6 billion euros higher than officially stated. The ministry contradicted this statement – a spokesman said the figures were “incomprehensible”.
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In the draft of the long-controversial federal budget, around 36 billion euros are earmarked for the citizen’s allowance. This sum is an “estimate” based on official assumptions on economic development, unemployment and inflation, among other things, said the spokesman. More than five million people receive citizen’s allowance.
“Bild” writes that Heil and his officials expect expenditure for the standard rates of the citizen’s allowance and the costs of accommodation to total 45.6 billion euros. The ministry’s spokesperson replied that the costs of accommodation, for example, would be paid to a significant extent by the municipalities. These, for example, would not be relevant for the federal budget in the amount stated.
The Labor Ministry argues that the basis of its calculations for the citizen’s allowance and the federal contribution to the costs of accommodation and heating is based on the government’s economic assumptions from the spring. Overall, the draft budget is based on the assumptions of the current spring projection on economic growth. Expected effects of the government’s growth initiative have been taken into account. However, leading economic research institutes recently lowered their economic forecasts for this year.
Merz: “Citizens’ income underfunded”
According to media reports, the Federal Audit Office had already criticized the budget planning of the traffic light coalition for the citizen’s allowance a few days ago. The government is expecting billions in savings compared to the previous year, also because it had already agreed on certain tightening of sanctions. However, the Court of Audit also fears that the estimates in the draft budget for 2025 for the citizen’s allowance and the benefits for accommodation and heating are not sufficient anyway.
CSU regional group leader Alexander Dobrindt said: “Enough of the sleight of hand tricks with the citizen’s allowance.” Heil must speak openly about what costs are to be expected “from the completely disastrous citizen’s allowance.” Union parliamentary group leader Friedrich Merz (CDU) said: “The year 2024 was already underfunded.” The budget estimate for the citizen’s allowance in 2025 was too low from the start.
Household after long dispute
The traffic light coalition wants to pass the budget at the end of November, at the end of the budget week in the Bundestag. The traffic light leaders had been arguing about a draft for months. Criticism of this last complete traffic light budget before the federal election came from the opposition, the Court of Auditors, the Bundesbank and economists. The traffic light coalition wants to spend almost 490 billion euros next year, 179 billion euros of which will go to the social sector overseen by Heil – by far the largest item.
Citizens’ income under criticism
For months, there has also been fundamental criticism of the citizen’s allowance. The tenor is that because of the amount, work or a top-up in a job is not sufficiently worthwhile for many recipients. The Union wants to tighten the citizen’s allowance rules. There has also been criticism within the traffic light coalition. The FDP, for example, warns: “Those who go to work must always have significantly more in their pockets than someone who lives off taxpayers’ money.”
In 2025, people on basic social security will have to make do with a zero increase, and the citizen’s allowance will not increase after a significant increase this year. The main reason is the sharp decline in inflation, which is easier on the wallet when it comes to consumption. This is reflected in the standard rates due to the current adjustment mechanism. Inflation is calculated in two steps, first from previous years and then from the most recent recorded quarter.
Single people currently receive 563 euros a month. Adults who live with a partner receive 506 euros. For children and young people, the rates are between 357 and 471 euros. 5.4 million people are affected, including many children. Those affected by long-term unemployment often lack a school or vocational qualification.
