Citizens’ benefits for Ukrainian refugees could cost Germany billions this year. New study results are fueling the debate about how more refugees can be put into work to save money. A look at neighboring countries shows how it can work.
The citizen’s money debate is gaining new momentum. According to a study by the Institute for Labor Market and Occupational Research (IAB), it reduces the incentive to take up work. Unemployed recipients of citizen benefit take six percent fewer jobs than before it was introduced.
The new findings are also likely to fuel the debate about the special regulation for refugees from Ukraine. On June 1st last year, the traffic light coalition decided that they would receive citizen’s money instead of asylum seeker benefits – i.e. 502 instead of 410 euros. A single Ukrainian refugee receives 103 euros more per month than a refugee from another country.
There are currently more than a million war refugees from Ukraine in Germany. According to the Federal Employment Agency, around 850,000 of these are Ukrainians of working age. According to the Ministry of Labor, only around 215,000 have a job – that’s almost 25 percent.
This means: According to Federal Finance Minister Christian Lindner (FDP), the citizen’s benefit for Ukrainian refugees could amount to “5.5 billion to 6 billion euros” this year. A sum that would be significantly lower if more Ukrainians worked.
According to critics, the fact that the rate in this country is still so low is primarily due to citizens’ money. It makes it possible to avoid taking up a low-paying job quickly without financial pressure. it is said again and again. CDU leader Friedrich Merz, among others, has been calling for a tougher approach since the beginning of the year.
The new study results now support this requirement. “Citizens’ money has a real basic idea, but job take-ups have so far been too weak,” says IAB researcher Enzo Weber to the “Süddeutsche Zeitung”. Annually, 30,000 positions remain unfilled for the time being.
The declared goal of the citizens’ money critics: to get more Ukrainians – and Germans – into work with tougher measures.
Some of Germany’s neighboring countries are already taking a more restrictive course towards Ukrainian refugees. And others have obviously had the right means at hand to integrate refugees into their labor market since the beginning of the war.
In Poland, Ukraine’s direct neighbor, where around 950,000 war refugees are currently registered, social benefits depend on the personal situation and the specific support offers. These are offered by both the Polish government and international organizations.
An important but simple step to access work, education, healthcare and social assistance in Poland is to apply for a national identification number (PESEL).
Immediately after their arrival, refugees in Poland also receive one-off financial support of the equivalent of around 66 euros. In addition, they are entitled to child benefit of 110 euros per child per month as well as other social benefits under the same conditions as Polish citizens, including free but temporary places in refugee accommodation.
The Polish state spends around eight euros per day per person on accommodation in collective accommodation – for four months. Since March 2023, refugees from Ukraine have had to pay half of the accommodation costs themselves after these four months.
The relatively low structural and institutional hurdles in Poland facilitate access to the labor market, which made the country an attractive destination for Ukrainian refugees after the outbreak of war. The low monetary social benefits could also have contributed to many people taking up work.
According to an analysis by the Federal Agency for Civic Education (bpb), almost 900,000, i.e. around 70 percent of the people who fled from Ukraine to Poland, were employed just one year after the start of the war.
However, scarcity of living space, high rents and the lack of long-term integration assistance as well as the improvement in the security situation in Ukraine have led to many of them leaving Poland again and some of them moving on to other countries, especially Germany.
Similar to Poland, the mood in the Czech Republic regarding social benefits for Ukrainian refugees has also changed. According to reports from the Czech news portal “Seznam Zprávy,” the government has drastically cut spending on Ukrainian refugees.
In June 2023, around 71 million euros were spent on humanitarian aid and solidarity surcharges; in the following July, these expenditures fell to around 46 million euros. The reason for this is the “Lex Ukraine” law, which came into force in July and regulates benefits for refugees.
Since July 2023, people living in registered accommodation have received housing benefit of 125 euros per month. In addition, refugees continue to receive humanitarian assistance based on their need. Children, students and seniors receive higher support of around 200 euros per month, other needy groups around 130 euros.
Some refugees then left the country and returned to Ukraine, while others decided to look for work in the Czech Republic to support themselves. “This had a noticeable impact on the labor market, which despite everything continues to grow stronger,” says Czech Labor Minister Marian Jurečka.
There are currently 340,000 Ukrainians registered as war refugees in the Czech Republic. According to the Czech Labor Office, around two thirds of them are employed.
The Danish “job turbo” is similarly successful. In the first year after their arrival, half of the Ukrainian refugees were employed in Denmark; currently the figure is around 55 percent.
The reason for this is innovative approaches. At the beginning of the wave of refugees, the “Jobguide Ukraine” initiative found jobs for which English language skills were sufficient and where language lessons took place in parallel after work.
Unlike in Germany: language courses in particular are seen as a major problem by Ukrainian refugees. The required level is too high for many people.
In addition to quick placement in work, Denmark also offers social support for refugees. Municipalities that successfully put refugees into work also receive financial support from the state. These incentives and the opportunity to learn the Danish language in daily contact with locals seem to contribute to effective integration into the labor market.
More Ukrainian refugees are also employed in the Netherlands than in Germany. According to a study by the Friedrich Ebert Foundation last year, the employment rate there is around 70 percent. This puts the country at the top in Europe when it comes to labor market integration. A comparison that leads politicians like CSU regional group leader Alexander Dobrindt to make statements like “Germany offers the wrong incentives.”
However, figures from the National Statistics Authority (WODC) from May 2023 show that only 49 percent of male and 51 percent of female refugees from Ukraine work in the Netherlands. This means that the difference to Germany is somewhat smaller, but still twice as large.
But the fact is that social benefits in the Netherlands are significantly lower than in Germany, at 200 to 400 euros per person. In addition, the Netherlands pursues an unbureaucratic “Working First” approach, while Germany initially relies on compulsory language and integration courses.
Kasper Otten from WODC commented: “We don’t yet know which model will lead to better integration into the labor market in the long term.” The IAB also does not consider the German approach to be unsuccessful per se. Researcher Enzo Weber says: “The approach is the right one: qualifying people for better-paying jobs more often instead of simply placing them in the first job that comes along, as is often the case under Hartz IV.”
However, he explains the lower rate of employment primarily with the relief that the Citizens’ Allowance has brought compared to Hartz IV – from which the Ukrainian refugees also benefit.