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Budget: New debate on citizen’s allowance ahead of traffic light round on budget

Budget: New debate on citizen’s allowance ahead of traffic light round on budget
Budget: New debate on citizen’s allowance ahead of traffic light round on budget

Will sanctions for the misuse of the citizen’s allowance also be on the table during the budget negotiations? There is not much time left to get the 2025 federal budget on track.

Ahead of the difficult negotiations on the 2025 budget, a debate has broken out about tougher sanctions for misuse of the citizen’s allowance. The “Bild” newspaper reported on a plan by the SPD to cancel the citizen’s allowance in cases of simultaneous illegal work.

“It is only fair to impose stricter sanctions on illegal work and welfare fraud,” explained Dagmar Schmidt, deputy leader of the SPD parliamentary group, when asked. “Neither of these are trivial offenses, we have always made that clear.” However, she did not comment on the details of the report. In general, Schmidt emphasized that the citizen’s allowance is “based on finding permanent work – it strengthens qualifications and further training.” This is also a response to the shortage of skilled workers.

FDP General Secretary Bijan Djir-Sarai agreed to tougher sanctions. He told the “Tagesspiegel”: “Anyone who receives citizen’s allowance and at the same time works illegally must be severely sanctioned.”

The red-green-yellow federal government of Chancellor Olaf Scholz (SPD) is facing particularly difficult negotiations on the budget for the coming year due to the austerity measures imposed by the debt brake on the one hand and the spending wishes of the ministries on the other. The cabinet is expected to approve the budget at the beginning of July.

A meeting between Scholz, FDP leader and Finance Minister Christian Lindner and Vice Chancellor Robert Habeck (Greens) is expected on Sunday. The discussion will focus on the 2025 federal budget. According to information from the German Press Agency, a special meeting of the SPD executive committee is scheduled for the same day to address the party’s historically poor result in the European elections.

Report: No citizen’s allowance for two months if you work illegally

The “Bild” newspaper reported, citing SPD party circles, that citizens’ allowance recipients who are caught working illegally should have their state benefits cut. Analogous to the sanction for “total objectors”, the standard rate should not be paid for two months. Rent payments should continue to be paid in order to prevent homelessness. The newspaper wrote that Scholz, Federal Labor Minister Hubertus Heil and SPD Chairman Lars Klingbeil were behind the plan, which was also part of the ongoing negotiations for the 2025 federal budget.

Scholz demanded that his coalition be willing to cooperate in the budget negotiations. The budget for next year is “just a task that we have to solve soon, on time at the beginning of next month,” said the SPD politician on Saturday in an interview with ZDF before his departure from the G7 summit in southern Italy. It is about doing everything possible to ensure that Germany has good growth and modern jobs. Scholz warned: “And that also means that we have to pull ourselves together and pull ourselves together in the way we reach an agreement.”

In an interview with RTL/n-tv, he said the budget would be drawn up “very soon”. “I am very happy that this is happening in a confidential atmosphere. And I want to maintain this confidentiality now,” said Scholz. He named a priority: “Personally, it is important to me that we do not endanger our social cohesion, our togetherness, our welfare state, which we have developed so carefully in Germany and which makes a good contribution to security for all citizens.”

FDP: Difference between working and not working too small

In view of the difficult budget discussions, Lindner called for improvements to the citizen’s allowance. “In view of practical experience, the expectations of the citizen’s allowance have not all been fulfilled. That is why I am convinced that improvements must be made,” Linder told the “Rheinische Post” against the background of an increase in the cost of the citizen’s allowance. “Some people seem to have misunderstood the citizen’s allowance as a form of unconditional basic income.” But that is not what it is meant to be.

Lindner sees “a willingness to talk” about this issue among the coalition partners SPD and the Greens. He explained: “The majority of citizens feel it is unfair if the difference between working and not working is too small. Anyone who claims social benefits should make an effort to get back into work.” The citizen’s allowance, the successor to Hartz IV, was introduced on January 1, 2023.

Lindner reserves supplementary budget for 2024

The minister also commented on a possible supplementary budget to the 2024 budget: “We are looking at the development of tax revenues and government spending. If they diverge too much, I am obliged to act.” For example, the Ministry of Economic Affairs has announced that green electricity will be nine billion euros more expensive. “If we have to act, a budget freeze would be conceivable on the one hand,” he explained. “But that would also affect investments and would exacerbate the weak growth of our economy. On the other hand, a supplementary budget would make it possible to recalculate the borrowing permitted due to the economic situation.” The government of Hendrik Wüst (CDU) in North Rhine-Westphalia has just done that, “and I reserve the right to do so as well.”

The debt brake was enshrined in the Basic Law in 2009 after the global financial crisis. According to this, the federal and state governments are no longer allowed to balance their budget deficits by taking out loans. While the states are absolutely prohibited from taking on debt, the federal government has a small amount of leeway. After years of exceptions, partly because of Corona, the federal budget for the current year has so far complied with the debt brake again.

Source: Stern

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