Arbeiterwohlfahrt proposes bundling German social benefits to combat poverty

social welfare reform poverty reduction social benefits bundling German social state Ifo Institute study

The Arbeiterwohlfahrt (AWO) has proposed a major reform of the German social welfare system to combat poverty and reduce bureaucracy. Supported by a study from the Ifo Institute, the proposal suggests bundling several social benefits—including basic security (Bürgergeld), housing allowance (Wohngeld), and child supplements (Kinderzuschlag)—into a single, integrated transfer system.

Key features of the AWO plan include a unified definition of income to simplify administration and the introduction of an ‘employment booster’ to incentivize social security-covered work. The reform also proposes a specific tax allowance for single parents. According to the Ifo Institute, the plan could reduce the poverty risk rate by 0.9 percentage points and potentially move 322,000 people into employment.

The reform is estimated to cost approximately 5.4 billion euros annually. To offset these costs, the AWO suggests reducing tax advantages for wealthier families, which could save over 3 billion euros. The proposal aligns with ongoing discussions within the German government regarding a significant restructuring of the social state to make it more efficient and accessible.

Entities

Arbeiterwohlfahrt · Berlin · Federal Ministry of Labour and Social Affairs · Germany · Ifo Institute · Lukas Hochscheidt · Maximilian Blömer

Claims

What the coverage asserts, and how many sources carry each claim.

[● 3 SOURCES] AWO proposes merging several social benefits to combat poverty. radioosnabrueck.de · www.berliner-sonntagsblatt.de · www.oldenburger-onlinezeitung.de
[● 3 SOURCES] Over 3 billion euros could be saved by adjusting the gap between child benefits and tax allowances for childcare and education. radioosnabrueck.de · www.berliner-sonntagsblatt.de · www.oldenburger-onlinezeitung.de
[● 3 SOURCES] The reform would reduce the poverty risk rate by 0.9 percentage points. radioosnabrueck.de · www.berliner-sonntagsblatt.de · www.oldenburger-onlinezeitung.de
[● 3 SOURCES] The reform suggests merging housing allowance (Wohngeld), child supplement (Kinderzuschlag), and basic security (Grundsicherungsgeld). radioosnabrueck.de · www.berliner-sonntagsblatt.de · www.oldenburger-onlinezeitung.de
[● 3 SOURCES] The reform would result in additional fiscal expenditures of nearly 5.4 billion euros per year. radioosnabrueck.de · www.berliner-sonntagsblatt.de · www.oldenburger-onlinezeitung.de
[● 3 SOURCES] The Ifo Institute conducted a study commissioned by the AWO Federal Association. radioosnabrueck.de · www.berliner-sonntagsblatt.de · www.oldenburger-onlinezeitung.de