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In a move aimed at addressing the financial strain on the social system, the German government has announced plans to freeze basic security benefits for 2026. The decision, which is subject to cabinet approval, comes as part of a broader initiative to reform the social system, with several laws expected in the fall.
The procedure that calculates annually whether adjustments are necessary to the amounts for basic security benefits has determined that there will be no increase in 2026. This decision follows a zero round in 2025 and the significant increases in 2023 and 2024 to compensate for high inflation.
The government commission for social state reform, led by Federal Minister Bärbel Bas (SPD), will begin its work and is expected to submit proposals by the end of the year. The commission's goal is to ensure that health, long-term care, and pension insurance remain capable of performance and not overwhelmed in the future.
The freeze on benefits will affect singles, who will receive 563 euros per month, and children, who will receive between 357 and 471 euros, depending on their age. The decision has been met with criticism from some quarters, with the Left party leader Jan van Aken stating that the plans pinch the poor and benefit the super-rich.
The leaders of the Union and SPD parliamentary groups agreed on this plan, along with other proposals, during a retreat in Würzburg. The Union's Steffen Bilger has called the plans for 2026 a correct signal, while the CDU's Armin Laschet has reaffirmed his analysis that the current system is no longer sustainable with the income it generates.
The reforms have also been supported by Gesamtmetall, the employers' association, which called the reforms overdue given the long economic crisis, with almost every third euro of the gross domestic product now going into social spending. Minister of Labour, Barbara Bas, has announced regulations to achieve "more momentum in support." Those who miss appointments without good reason will have a significant amount deducted.
However, the German Social Association has accused Armin Laschet of distortions, stating that he gives the impression that the social state is ruining the country financially. Joachim Rock, the main managing director of the Paritätischer Gesamtverband, has stated that the second zero round in a row means "more hardship and growing exclusion."
The coalition, which includes the SPD and the CDU, has emphasised that these reforms will involve painful decisions and cuts. The Minister of Labour, Barbara Bas, has stated that politics is to blame for the unsustainable system and changing this is a challenging path. The SPD parliamentary group leader, Matthias Miersch, has added that this should apply to the entire coalition.
As the government commission for social state reform begins its work, the focus remains on finding a balance between financial sustainability and social justice in the German social system.
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