(de-news.net) – As part of a broader effort to modernize and streamline Germany’s welfare state, federal, state, and local governments are advancing plans for a far-reaching consolidation of core income-related social benefits. The final report of the government-appointed Commission on Social State Reform, scheduled for publication on Tuesday, sets out a proposal to merge the existing housing benefit, child supplement, and Bürgergeld—reframed in the report as basic income support—into a single, integrated assistance scheme. Across its 26 recommendations, the commission emphasizes digitalization as a central instrument for reform, presenting it as essential to improving the precision of benefit allocation, accelerating administrative processes, and lowering barriers to access for eligible households.
Under the proposed framework, the future basic income support would continue to guarantee the subsistence minimum for people in need, while simultaneously absorbing benefits that currently serve low-income households not fully dependent on income support. Although housing benefit and the child supplement were originally conceived as mechanisms to reduce interaction with job centers, their parallel existence alongside basic income support has produced a fragmented landscape. This fragmentation has resulted in multiple applications, overlapping administrative responsibilities, and frequent referrals between agencies, often leaving beneficiaries navigating complex bureaucratic pathways. The commission therefore argues that administrative bundling is a necessary corrective, both to eliminate institutional inefficiencies and to reduce the cumulative administrative burden placed on citizens seeking assistance.
The report also identifies insufficient coordination between benefits as a structural disincentive to employment. In its analysis, households that expand their labor supply—such as when a recipient moves from part-time to full-time work—frequently experience little or no improvement in disposable income. This outcome is attributed to offsetting rules under which higher earnings trigger substantial reductions in income-related benefits. To counteract this effect, the commission recommends revising these calculation mechanisms so that increased work effort translates more clearly into higher net income. Such changes are framed as essential to strengthening employment incentives and aligning income support more closely with the long-term objective of enabling employable recipients to achieve financial self-sufficiency.
Strengthening work incentives through a restructuring of competencies
Administrative restructuring is further supported by proposals for a clearer and more transparent allocation of responsibilities between institutions. Job centers would assume responsibility for all beneficiaries deemed capable of working at least three hours per day, while municipal social welfare offices would serve individuals who are not employable. At the same time, the commission notes that achieving a fully unified administrative structure would require an amendment to Germany’s Basic Law, specifically Article 91e, which currently prescribes a different division of competencies. The report therefore calls for this constitutional issue to be addressed promptly. Alongside institutional consolidation, the commission advocates a comprehensive “digital reset” of the welfare state, encompassing automated processing of recurring information, extensive data sharing across federal, state, and local authorities, and the automatic disbursement of child benefits following a child’s birth. The expanded use of artificial intelligence in social administration is also discussed as a potential means of improving efficiency and consistency in decision-making.
In terms of composition, the commission differed markedly from earlier advisory bodies that were dominated by academic experts. Instead, it was largely made up of governmental actors, including representatives from eight federal ministries, several Länder such as Bavaria, North Rhine-Westphalia, and Hamburg, as well as municipal umbrella organizations. Chaired by the Federal Ministry of Labor and Social Affairs under Minister Bärbel Bas of the Social Democratic Party, the body focused exclusively on tax-financed benefits. Reforms of contribution-based systems, including pensions, are being addressed in separate processes. Against the backdrop of ongoing political debate over alleged misuse of income support, the report also encourages the federal government to advocate at the European level for tighter rules that more closely link EU citizens’ access to German social benefits to sustained and substantial employment.
