Savings plan: Government's citizen's money reform saves millions
At one point, Friedrich Merz wanted to save double-digit billion sums with the citizen's allowance. In the summer, the coalition tightened some rules. Now there are the first figures on the impact.
The German government's recent Citizen's Money Reform is proving to be a cost-saving measure, as the public budgets are currently saving millions, as reported by the federal government. The Arbeitsministerium estimates that the costs for basic security in recent months were about "100 million euros less than in the previous month's previous year," according to a spokesperson in Berlin.
The 2027 budget for basic security for job seekers is set at 50.8 billion euros by the federal budget projection. The "Süddeutsche Zeitung" had previously reported that the costs for basic security, including rents, would remain at pre-reform levels. Specifically, the amounts were 3.3 and 3.4 billion euros in September and August, respectively, down from 3.4 and 3.5 billion euros in the respective previous months, as shown by the monthly reports of the Bundesfinanzministerium.
In July, costs amounted to the unchanged 3.5 billion euros. Friedrich Merz, who was then CDU leader but not yet Federal Chancellor, had stated in an interview in December 2024, "We will turn this system on its head. There are going to be double-digit billion savings." Vise Chancellor Steffen Meyer emphasized that the government remains convinced of the reform, aiming to bring people into work and save money. However, for a complete assessment, it is too early.
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