Potential budget reduction for the New Basic Security?
In a significant move, the Merz government is planning to introduce a new basic security to replace the current citizen's allowance. This announcement comes as part of a broader strategy to save double-digit billion amounts, as announced during the Bundestag election campaign.
The proposed new basic security is expected to provide a poverty-proof level of support, including the full coverage of electricity costs within the basic security benefits starting from 2027. This move is in response to demands from welfare organizations who consider the current citizen's allowance, particularly the standard rate of 563 euros for singles, too low.
Currently, around 5.5 million people in Germany receive the citizen's allowance. The amount varies depending on the living situation, with a single person receiving a standard rate of 563 euros and a couple in a need community receiving 1012 euros.
The government is also planning to revert the adjustment mechanism of the standard rates with regard to inflation to the legal status before the corona pandemic. However, it's important to note that the standard rate of the citizen's allowance cannot be reduced, as it may not fall below the subsistence minimum.
In addition to these changes, the government estimates that 1.5 billion euros could be saved next year, with potential savings increasing to 4.5 billion euros in the future. These savings are expected to come from the social allowance, the "new basic security."
The exact height of the new basic security for job seekers, as announced in the coalition agreement, has not been disclosed yet. This new policy is expected to provide a more comprehensive safety net for those in need, aiming to address concerns about the current citizen's allowance being insufficient.
Stay tuned for more updates as the details of the new basic security are further clarified and implemented.
