As of: January 26, 2024, 2:39 p.m
By: Amy Walker
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According to Finance Minister Christian Lindner, there should be no further increase in citizens' money next year.
The Minister of Social Affairs also thinks this is possible.
Berlin – The payment of the increased citizen's allowance has barely begun when the next adjustment is already being considered.
After the increase of a whopping twelve percent - and the subsequent debate as to whether work is still worth it in view of this - Finance Minister Christian Lindner (FDP) is calling for a zero round in 2025. So: no increase in citizens' money next year.
Lindner wants to revise the mechanism for adjusting citizens' money
The standard rate rose sharply on January 1st of this year, said the FDP politician on Thursday evening (January 25th) on the ZDF program “Maybrit Illner”.
“I say it has risen disproportionately because when it was set, a completely different inflation rate was assumed for January 2024.” According to his expectations, the consequence will be that there will be a zero round on January 1, 2025 , “to reincorporate the disproportionate increase.”
At the beginning of the year, citizens' money increased by an average of around twelve percent compared to 2023.
For single people, this means an increase of 61 to 563 euros per month.
Adults who live with a partner receive 506 euros.
For children and young people, the rates are between 357 and 471 euros, depending on age.
FDP leader Christian Lindner wants to prevent the citizen's benefit increase in 2025 © Hannes P. Albert/dpa
The reason for the increase is the increased cost of living, which is taken into account when calculating the standard rates.
The standard rate for citizens' money is adjusted annually to prices and wages and also takes inflation into account.
Lindner recently called for the method for calculating citizens' money to be reviewed so that inflation is not overestimated.
According to Hubertus Heil, the citizen's benefit increase in 2025 will be “very, very low”.
Social Minister Hubertus Heil (SPD) also expects that citizens' benefits will only be slightly adjusted next year.
In December 2023, he announced an increase that is expected to be “very, very low” – as long as inflation remains low as expected.
Economists assume that this will roughly halve in 2024.
In 2023 the rate was 5.9 percent.
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Now, in response to Lindner's demands for a zero round, Heil reiterated that citizens' money is based on price developments.
“If inflation falls significantly now, the next adjustment will be correspondingly low,” he told
Spiegel
.
However, it would still be based on the legal minimum subsistence level - and would not be "rolled by dice", as he went on to say.
“Since the prices that are crucial for the subsistence level, such as food and electricity, rose sharply last year, there was a significant adjustment to citizens’ money.”
If the forecasts come true, with an inflation rate of three percent, an increase in citizens' money by 16.89 euros to 579.89 euros could be justified.
With an increase of two percent, recipients would receive 11.26 euros more than today.
Criticism of Lindner's initiative from the social association: "Lindner throws smoke candles"
In January, citizens' money replaced Hartz IV in its old form as the traffic light government's central social reform.
The standard rates had already increased by around 50 euros at the beginning of 2023.
The reform means that the level of benefits will be adjusted to price developments more quickly than before.
In the past, inflation was only taken into account with a very long delay.
The wage and inflation levels are now taken into account for the standard rates for the following year up to the second quarter of the current year.
Lindner's initiative has met with criticism from the social association SoVD.
“Christian Lindner is once again throwing smoke candles on the subject of citizens’ money.
The adjustment is not determined on political talk shows, but follows clear criteria set out in the law, such as inflation and wage developments,” says CEO Michaela Engelmeier to our editorial team.
“To question the already scarce benefits for the poorest and to speculate about zero rounds is outrageous and deepens social divisions.”
Engelmeier is once again calling for savings to be made elsewhere and is calling for a higher top tax rate.
“Instead of always demanding savings from the most vulnerable first, it is time to present solutions on the revenue side and tax huge fortunes and the highest incomes more heavily.”
Minimum wage increases less significantly - fuels the citizen's money debate
But the reform of the citizen's allowance has made it increasingly clear that the minimum wage lacks a clear mechanism for adjustment.
As a result, the citizen's benefit level approaches that of the minimum wage more quickly, giving the public the impression that working is less worthwhile.
This can be refuted again and again in studies - but the debate remains.
The Minimum Wage Commission decides on the level of the minimum wage every two years.
This consists of employee and employer associations that have to come to an agreement together.
In 2023, for the first time, there was no unanimous decision.
Because of a single vote, the employer's proposal prevailed, which is why the minimum wage should increase by only 3.42 percent to 12.41 euros in 2024.
In 2025 it will then rise to 12.82 euros.
With material from dpa