The 5.5 million citizens’ benefit recipients in Germany have to prepare for a zero round next year.
As part of the budget negotiations, Hubertus Heil’s (SPD) Ministry of Labor informed Christian Lindner’s (FDP) finance department, according to information from “Bild am Sonntag”: Based on the latest calculations, there will be no further increases in citizen’s benefit rates in 2025.
An internal government paper on the costs of citizens’ benefit, which is available to “Bild am Sonntag”, states: The estimates for the budget preparation were made on the basis of “the growing expectation that the standard rate adjustment on January 1, 2025 will be a zero round”.
By law, the government must review the amount of citizens’ benefit every year. Inflation accounts for 70 percent of the calculations and net wage development for 30 percent. The zero round will be finally announced in the summer, when the last calculations of the contribution rates based on the latest inflation data have been completed.
Despite the lack of an increase in citizens’ benefit, there is a heated debate in the government about social spending. Lindner has publicly spoken out in favor of cuts in this area. According to information from “Bild am Sonntag”, the Ministry of Labor, on the other hand, has announced an additional requirement of 4.6 billion for the 2025 budget. This increase was triggered by an additional requirement of almost 3.9 billion euros for “legally mandatory compulsory services”.
Specifically, citizen’s benefit has an increase of 2.3 billion euros, and basic security in old age has an increase of 1.6 billion euros. According to government circles, this is due to the fact that this year’s increase in contribution rates has not yet been fully incorporated into medium-term financial planning.
In addition, the Ministry of Labor reported an additional need of 650 million euros for the job centers. The justification given to the Ministry of Finance for this increase was that the job centers needed these funds in order to increasingly place the high number of Ukrainian refugees in jobs.