Enhanced expenditure on social aid witnessed - Significant rise observed in social aid expenditures
In a recent report from the Federal Statistical Office in Wiesbaden, it has been revealed that Germany's social assistance expenditures under the Social Code Book XII (SGB XII) experienced a significant increase in 2024, totalling 20.2 billion euros - a 14.8% rise from the previous year [1].
The breakdown of these expenditures for 2024 is as follows:
- Basic income support for the elderly and individuals with reduced earning capacity (basic security) - €11.4 billion, a 13.3% increase. This category, which accounts for the largest share at 56.5% of social assistance spending, is fully federally reimbursed to the Länder [1].
- Long-term care assistance - €5.3 billion, a 17.7% rise, reflecting higher care needs and costs [1].
- Support for subsistence needs (living expenses) - €1.6 billion, up by 11.1% [1].
- Other categories, including health-related assistance, help addressing social difficulties, and assistance for other life circumstances - €1.9 billion, increasing by 19.4% from the previous year [1].
Under a related framework, the Federal Participation Act (BTHG) regulated in SGB IX since 2020, integration assistance for persons with disabilities amounted to €28.7 billion in 2024, a 12.9% increase compared to the prior year [1].
The surge in expenditures can be attributed to demographic pressures such as an increasing elderly population needing care, as well as broader social and economic challenges. The government is also planning reforms affecting social welfare benefits like the Bürgergeld (citizen’s allowance), particularly aiming to reduce housing support for poor households amidst rising rents [2].
However, overall social welfare expenditures, including pensions and health care, face sustainability challenges due to demographic shifts and economic stagnation [3]. This comprehensive expenditure rise across basic security, care, subsistence, health, and social difficulty support indicates growing government investment in social protection domains despite fiscal and demographic pressures [1][3].
- To alleviate some of the fiscal pressures and provide positive outcomes for the community, there could be a proposal to reallocate a portion of the increasing social assistance expenditures towards vocational training programs for individuals with reduced earning capacity, thus empowering them to enter the business sector and contribute financially to their own livelihood.
- As part of a long-term strategy to ensure sustainability of social welfare expenditures, the government could consider partnering with private sectors for investments in vocational training programs, as these programs contribute not only to the financial independence of individuals but also to the overall stability and growth of the economy.
