Citizens’ allowance will not be increased in 2025

In 2024, the citizen's allowance was increased by a record amount due to high inflation. Next year, a zero increase will be announced.

The citizen's allowance is apparently not to be increased in 2025. Labor Minister Hubertus Heil explained in the ntv program “Frühstart”: “Thank God inflation has fallen sharply, only 1.9 percent last month. And that is why the figures and the legal mechanism indicate that there will be no increase in the citizen's allowance on January 1st.

In 2024, the citizen's allowance was increased by 61 euros. The increase of twelve percent sparked sharp criticism because recipients were forced to receive a higher inflation compensation than many employees. For 2025, the rate for single parents and single people will remain at 563 euros per month.

People in need must be helped, stressed Heil. “But it is also clear: This is the minimum subsistence level, no more, but also no less.” The calculation of the citizen's allowance is prescribed by law. It is based on the price development of everyday products and services.

In addition to the freeze, the requirements for a citizen's allowance recipient are being tightened. Medicinal plants, those affected will have to appear in person at the job center and sanctions will be imposed more quickly if they do not cooperate. The citizen's allowance can be reduced by up to 30 percent.

In addition, Heil will expect job seekers to commute to work for up to three hours and will also require single people to move. The protected assets of 15,000 euros that citizens' allowance recipients are allowed to keep will also be used after six months. This means that recipients will be able to build up fewer reserves.

In addition to putting more pressure on those receiving citizen's allowance, incentives to take up work will also be increased. For example, long-term unemployed people will receive start-up funding to make the added value of work tangible.

The federal government's decision comes in the context of escalating costs in the federal budget. Due to the influx of more than a million people from Ukraine, the number of people receiving citizen's allowance has also risen significantly. During negotiations for the 2025 budget, the traffic light coalition agreed to slow down and possibly reduce spending on citizen's allowance.

The FDP had already called for fundamental reforms to the citizens' allowance. FDP parliamentary group leader Christian Dürr had even suggested a “downward adjustment”. Federal Justice Minister Marco Buschmann (FDP) subsequently said that, in his view, this was legally possible. Heil's Social Ministry had already announced the foreseeable zero increase at the end of July. “We are currently expecting that, given the current declining price increases, there may well be no increase on January 1, 2025,” it said at the time.

From the point of view of the German Social Association (SoVD), the announced freeze on benefits fails to provide insight into the realities of life for those affected. “Poverty is part of everyday life for many people in Germany. The fact that, after years of crisis and prices for everyday items remaining at a high level, a freeze on benefits is now looming is due to the current calculation formula for standard needs,” complained SoVD board chairwoman Michaela Engelmeier.

Engelmeier is counting on the calculation formula to reduce the amount of standard needs and not to determine the actual need. “What is needed is a new method of determining needs that realistically reflects the everyday needs of those affected and prevents poverty in our country from increasing further.”