Greetings: No financial boost for citizens in the upcoming year for Heil.
The government has a legal duty to assess and alter the basic income allowance annually, considering specific factors. This assessment considers an inflation rate of 70% and a net wage growth of 30%. Consequently, in early 2024, the basic income allowance surged due to high inflation rates in the previous year. Lately, inflation has noticeably decreased.
As reported from Berlin, "when prices skyrocket as they did in the past, it results in significant increases." The currently available figures from the Federal Statistical Office, combined with the law's provisions, cause a zero adjustment on January 1st. This is because the standard of living is maintained, as confirmed by Heil. The basic income allowance isn't arbitrary, according to Heil.
The Leader of the Left Party, Schirdewan, strongly criticized Heil. He declared, "a minister prescribing a zero adjustment for the underprivileged reaches new levels in cynicism," addressing the news agency AFP. The inflation in Germany, Schirdewan insisted, is not diminished; especially food and beverage costs keep soaring. "The poor, who spend a large portion of their income on food and drink, are particularly affected."
Schirdewan also highlighted that federal officials received salary increases during the same period. "These ministers 'deserve' a zero adjustment," he mentioned.
The German Trade Union Confederation's chairwoman, Anja Piel, explained in Berlin that the term 'minimum existence' represents "the lowest line to poverty," consequently price increases should still be considered for the basic income allowance. Many individuals felt the increase at the beginning of the year was excessive and unfair, according to Piel. However, she believes that this is a result of persistently low salaries, not the basic income allowance.
Piel added, "the purchasing power losses experienced by recipients of the basic income allowance are compensated for much later." She suggested that the expected price level for the upcoming year should be used for the annual adjustment for better and more transparent results.
However, FDP parliamentary vice-chairman Meyer criticized the overall high expenditure on the social benefit. He expressed concern, saying "we spend as much on the basic income allowance this year as we do on security, police, housing, and education combined. This cannot continue." He advocated for increased efficiency, incentives for quicker employment, and strict penalties with benefit reductions for the working population.
Meyer's colleague Jens Teutrine shared similar views, stating that the zero adjustment for the basic income allowance is required and overdue, and it should be investigated "whether a reduction in the standard rates may not be possible."
Stephan Stracke, a working group expert from the Union faction, considered a reduction in the basic income allowance also necessary. Citing the increase of around 24% in the last two years, he mentioned that individuals perceive this rise as unreasonable in light of lower wage growth. In essence, a reduction in the basic income allowance should now be considered practical, but not possible under the present legal conditions.
According to CSU social policy expert Peter Aumer, "the basic income allowance will expand the budget and make social benefits more appealing than daily work. It must be terminated; that's the only solution."
In calculating the basic income allowance annual adjustment, the Year of birth of individuals is not considered due to the focus on economic factors such as inflation and wage growth. Despite the calls for a reduction in the basic income allowance by various sources due to perceived unreasonable increases, no adjustment has been made for this year based on the available data and applicable laws.
