Economic downturn brings cost shock for citizens' allowance
At its introduction, Labor Minister Heil praised the citizen's income as the reform of the century. Now the traffic light amendment is causing a lot of trouble. Because the economic situation is bleak, the costs are exploding to almost 26 billion euros a year. The CDU/CSU sees a system error.
According to a media report, the new citizens' income is causing significantly higher expenditure than the federal government has planned in the budget for the current year. Federal Minister of Labor Hubertus Heil of the SPD needs up to 2.1 billion euros more than planned in the budget, as the "Bild" newspaper reported, citing a letter from State Secretary of Finance Florian Toncar to the Bundestag Budget Committee.
According to the letter, Heil has applied for "unscheduled expenditure" of up to 2.1 billion euros because the number of citizens' allowance recipients has risen due to the "significantly worsened economic situation", "Bild" quoted from the two-page letter. Citizen's income expenditure is therefore likely to rise to a total of 25.9 billion euros this year.
According to the report, the recipients of the citizen's allowance apparently also need more benefits. The "net benefits per community of need" have "developed more dynamically compared to the expectation of fall 2022", according to the letter to the Budget Committee.
CDU/CSU: system sets the wrong incentives
The budget policy spokesperson for the CDU/CSU parliamentary group in the Bundestag, Christian Haase, now fears a further increase in Citizen's Income expenditure to more than 27 billion euros in 2024 in view of the figures. That would be around five billion or a good 22% more than in 2022 (Hartz IV). "The increases show that this system sets the wrong incentives. Too much hammock, too little demand and support. This spending dynamic must be curbed," said Haase.
More than five million people in Germany currently receive citizen's income. From January 2024, the citizen's income will be increased by twelve percent. The unusually high increase decided by the federal government is due to inflation and rising net wages. The citizen's income replaced the previous Hartz IV payments at the beginning of the year.
In light of the increased expenditure, Federal Minister of Labor Hubertus Heil from the SPD may need to revise his budget for the citizen's income, potentially requiring additional funds beyond the initially planned 24 billion euros. This rise in expenditure is due to the significant increase in the number of citizens' income recipients as a result of the worsened economic situation.
The CDU/CSU criticizes this situation, suggesting that the current budget policy, including the citizen's income, encourages dependency and lacks incentives for employment, as indicated by Christian Haase, the budget policy spokesperson for the CDU/CSU parliamentary group.
Source: www.ntv.de
