Germany has taken a decisive step toward overhauling its long-term unemployment benefit, as parliament backed a bill that will introduce strict sanctions and place greater emphasis on getting recipients back to work.
Germany’s lower house of parliament, the Bundestag, voted on Thursday to pass sweeping reforms to the country’s primary long-term unemployment benefit, called “citizen’s allowance” (Bürgergeld).
In a roll‑call vote in Berlin, 321 MPs backed a bill to reform the benefit with 268 voting against and two abstentions, according to the German Press Agency (DPA).
The federal coalition government, comprised of the Christian Union parties (CDU/CSU) and Social Democratic Party (SPD), supported the reforms, while opposition parties voted against.
The changes, which have sparked fierce criticism from opposition politicians and social welfare groups, are expected to clear the upper house of parliament, the Bundesrat, allowing the government’s overhaul of unemployment benefits to move ahead.
The reforms will affect around 5.5 million people who currently receive citizen’s income. The existing scheme will be renamed “Basic security” (Neue Grundsicherung) and restructured with a stronger focus on job placement and stricter participation requirements.
Under the new rules, benefit recipients who are deemed fit for work will be required to cooperate more actively with Germany’s Jobcentres. Sanctions for non‑compliance will be significantly tightened.
For example, benefits for single adults – currently set at €563 per month – can be reduced by 30 percent for three months if recipients fail to apply for jobs or refuse to attend training courses. Benefits could be cut further, even completely, if recipients repeatedly fail to respond to the authorities.
READ ALSO: Who will be affected by Germany’s Bürgergeld reform?
People with mental illnesses should be spared the harshest sanctions, but may be required to attend a medical or psychological examination.
The reforms are due to be introduced gradually from July 1st this year, according to DPA.
Will the reforms save money?
During the last election campaign, the CDU/CSU parties said that reforming Bürgergeld could lead to potential savings running into the billions.
These expectations have since been scaled back. According to reporting by the Süddeutsche Zeitung, the reforms may actually recoup less than 0.2 percent of current expenditure on the benefit.
Government figures argue that significantly higher savings could be achieved if more people move into employment.
CDU Secretary General Carsten Linnemann admitted on RTL that it’s not yet clear if there will be major savings, but said that bringing 100,000 people into work could save between one and three billion euros.
What’s the reaction?
Chancellor Friedrich Merz welcomed the Bundestag vote, writing on X: “Everyone who is able to work should actually work. That is a question of social justice in our country.”
But opposition parties were sharply critical. Green MP Timon Dzienus accused the coalition of introducing “inhumane sanctions” and showing “fundamental mistrust of our own population”.
READ ALSO: Germany’s Bürgergeld reform could increase homelessness
Left Party leader Sören Pellmann said the reforms “rely on fear instead of trust” and warned that sanctions “do not lead to stable employment”.
Citizen’s allowance had replaced the previous “Hartz IV” system in January 2023, and was originally designed to reduce sanctions and offer more support to the unemployed.
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