Basic income benefit (Grundsicherung) is giving way to a modern system of Citizens’ Basic Income (Bürgergeld). State support will be less centralised, less bureaucratic and more targeted. The system for calculating regular payments will also be put on a new basis. In future, payments will no longer be retrospective. Instead, they will be adjusted according to projected inflation rates. “Anyone could find themselves in need, be it due to illness, unemployment or other misfortune,” explained Federal Health Minister Heil. “By introducing Citizens’ Basic Income, we are sending out a strong signal in support of security and greater respect.”

Communication on an equal footing

In order to allow those eligible for the new payments to focus on finding a job, the first two years of Citizens’ Basic Income payments will count as a so-called grace period, where housing and heating costs will be recognised and paid to their full value. The recipient’s means will not be considered, as long as they are not substantial. Once the grace period has expired, a means test will be carried out without unnecessary bureaucracy. Higher allowances also apply for those receiving the Citizens’ Basic Income.

The former social inclusion agreements are being replaced by cooperation agreements. These will be drawn up in partnership between the recipient and specialist integration staff. This agreement will then become the thread that runs through the integration process – it is a core element of the Citizens’ Basic Income law. Once the cooperation agreement has been drawn up, a trust period will apply. This period will focus strongly on trust and collaboration on an equal basis. The only sanctions will be for failure to attend appointments, up to a maximum of 10 percent of the payment.

Citizens’ Basic Income will no longer prioritise getting recipients into work or training, regardless of the relevance of a job or training course. Instead, those with few or no qualifications will supported as they work towards completing vocational training so as to give them access to skilled employment. A comprehensive coaching system will help recipients get into work if they have faced particular difficulties due to numerous individual problems. “By introducing the Citizens’ Basic Income, we are strengthening the welfare state and lifting people out of unemployment for good,” Heil said.

The new Citizens’ Basic Income means more security, more respect and greater freedom to live on your own terms.

Payment reductions are still possible

Those who fail to attend appointments will still have to expect sanctions. Payment reductions due to repeated failure to meet obligations or attend appointments could amount to as much as 30 percent of the relevant monthly regular payment. Costs for housing and heating will not be penalised. No payment reductions will be imposed if they would cause exceptional hardship in a specific individual case. The tougher special regulations for benefits recipients aged under 25 are being dropped.

The new package of regulations now also covers other areas: schoolchildren, students and trainees will now be able to keep more of the money they earn. The allowance for additional earnings is to increase to 520 euros. The aim is to reinforce the perception that it is worth taking on a job while at school or university.

Time restrictions on “Social Labour Market” regulations are also being lifted. This funding aims to make it possible for people who are particularly distant from the labour market to participate in society by undertaking long-term publicly funded employment and to make the transition to unsubsidised employment. These rules previously only applied until 31 December 2024.

The following regular payments will apply from 2023:

Brackets show changes from 2022. Actual costs of housing and heating will also be covered as long as they are reasonable. The payments will be in line with rents in the local housing market. (Exceptions apply to the first 24 months)

In future, payments will no longer be retrospective. Instead, they will be adjusted according to projected inflation rates. They will also take into consideration the latest available data on price trends relevant to regular payments. As such, the regular payments for the coming year have already been calculated. For example, from 01 January 2023 a single adult will receive 502 euros, 53 euros more than previously.