Sozialstaat: Gebündelte Sozialleistung könnte fünf Milliarden Euro mehr kosten

On 3rd September, Berlin's government has pledged to streamline, increase transparency and enhance effectiveness of the welfare state while simultaneously cutting costs. This would be achieved by consolidating key tax-funded social benefits - the basic income, housing allowance and child allowance - into one package. The blueprint for this is outlined in a report by the Social State Commission, though it merely sketches the broad outlines.

The Arbeiterwohlfahrt (Awo), a social benefits organization, has presented an alternative model calculated by the Ifo Institute. This model ensures no one, including childless couples, would be worse off. It also aims to better support households with children and low earnings above the subsistence level. According to the Ifo calculations, this would cost the state an additional €5.4 billion annually.

New rules would incentivize extra income to lead to more offered working hours, equivalent to the addition of 188,000 full-time jobs, reported Maximilian Blömer, the study author. The Ifo also calculated the potential impact of a similarly costly universal increase in child benefits for all parents, which would only increase the labor supply by 14,000 full-time equivalents.

The Awo proposal could offset a large portion of the costs for its model via a tax levy on wealthy landowners, said Lukas Hochscheidt from the Awo federal association. This could bring in more than three billion euros annually. The three tax-funded social benefits - basic income, housing allowance, and child allowance - currently cost approximately €60 billion annually.

However, Social Minister Bärbel Bas had promised at the introduction of the Social State Commission's report that there would be "no service cuts". Apparently, she assumes that savings will come from both improved efficiency and additional revenue generated by the system boosting work incentives overall. Bas intends to present specific legislative drafts for the restructuring of social benefits throughout the year.

Currently, the benefits are not coordinated, leading to situations where beneficiaries of basic income even lose money despite working more, because the state simultaneously cuts other benefits like housing allowance or basic income. For example, this can happen even with an income of €1,000 monthly, according to Ifo expert Blömer.

Therefore, the commission had suggested halving the exemption for additional income for low earners from €100 to €50 monthly so that the common combination of basic income and a part-time job would be less attractive. Conversely, the exemption for higher additional income above the part-time job limit of €603 monthly should be increased so that working more would noticeably pay off more.

Regardless of the debate around consolidating social benefits, the government plans to cut housing allowance by 1.5 billion euros initially, followed by 2 billion euros per year starting in 2028. The Ifo's calculation for the Awo doesn't include these savings. Economists warn that modernizing the welfare state could become expensive, as increased transparency could lead to significantly more people applying for social benefits.

Social organizations like Awo welcome this, as it would finally reach those who do not apply now, either because they are unaware of their rights or because the applications are too complicated.