Bertelsmann Calls for Comprehensive Citizen's Income Reform

The Bertelsmann Foundation has highlighted the need for an overhaul of Germany's Citizen's Income system, focusing on the inefficiencies within job center administrations. Despite having a budget of 10.7 billion euros last year, job centers have seen administration costs surge by 39% over the past decade, now reaching 6.5 billion euros. In contrast, funding for employment promotion has stagnated at 3.8 billion euros.

The Foundation criticizes the disproportionate allocation of resources, with some job centers diverting up to 70% of funds towards administrative expenses. It stresses the need for clear objectives to ensure taxpayer money is spent effectively. Roman Wink, a labor market expert from the Foundation, emphasizes that the number of people successfully integrated into the workforce should not be a secondary concern.

Recent political discussions have seen Union and SPD agree on reforming the Citizen's Income, with CDU leader Friedrich Merz proposing a new basic security for job seekers. This would include full withdrawal of benefits from recipients who refuse employment opportunities. The Foundation suggests early and consistent sanctions for missed appointments or declined offers, advocating for the immediate activation of recipients to prevent long-term unemployment.

Currently, 5.4 million individuals in Germany receive Citizen's Income. Among them, 2.7 million are not available for the labor market due to various reasons, including ineligibility or ongoing training. An additional 830,000 are employed but earning insufficiently, while 1.9 million are unemployed. The Bertelsmann Foundation underscores the importance of reducing bureaucracy and enhancing support and accountability to improve the system's efficiency.