The high number of employees and higher wages bring the Federal Employment Agency additional income through contributions from unemployment insurance. The authority can create a reserve again.
After spending billions on short-time working benefits during the Corona pandemic, among other things, the Federal Employment Agency wants to rebuild its reserves, which have shrunk to zero. At the end of the 2023 budget year, not only could a loan to the federal government of 423 million euros be repaid, but work can also begin to build up a reserve of 2.7 billion euros, the Federal Employment Agency announced on Friday after a meeting of the Federal Employment Agency Board of Directors in Nuremberg.
“This year we have a budget that is solid and balanced,” said the Federal Agency’s CEO, Andrea Nahles. Half of the planned spending in 2024 amounting to 44.6 billion euros would go towards unemployment benefit payments, and another quarter (10.4 billion euros) would go into further training. Nahles called it an “investment in the future.” It’s about leveraging domestic potential when looking for skilled workers. This means that a billion euros more will be available next year to qualify or further train people for the labor market.
Based on the Federal Government’s autumn forecast, the Federal Agency assumes that 100,000 people will receive short-time work benefits next year. At one billion euros, slightly less money is planned for insolvency money than in the current year.
What is planned for the 2024 financial year?
The deputy head of the agency’s board of directors, employer representative Christina Ramb, warned against too much optimism. “The federal government has made a very optimistic forecast. We don’t know whether that will come true.” The chairwoman of the board of directors, Anja Piel from the German Federation of Trade Unions, pointed out the high workload of the 114,000 employees at the federal agency. In recent years you have also worked to the limit to deal with the Corona crisis.
In the coming financial year 2024, the reserve is to be increased by a further 2.1 billion euros to 4.8 billion euros. The aim is to accumulate a reserve of at least 25 billion euros over the years in order to be prepared for crises such as a prolonged recession. Before the corona pandemic, the Federal Agency had built up a reserve of almost 26 billion euros, which was used up within two years, primarily through the payment of short-time work benefits and other benefits.
In the 2024 annual budget, the Federal Agency envisages total income, primarily from unemployment insurance contributions, of 44.6 billion euros and expenses of 42.8 billion euros. In 2023, there will be revenues of 42.2 billion euros and expenses of 39.5 billion euros. Among other things, the BA expected additional spending of around one billion in 2024 just for the payment of unemployment benefits.