As of: February 21, 2024, 11:43 a.m
By: Christoph Gschoßmann
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Does citizen's money leave you with more money than if you worked?
According to calculations by the Ifo Institute, the answer is clear.
Bremen - The standard rate for citizens' money was reformed - and the debates about the amount of support have heated up people ever since.
The thesis is increasingly being heard from politicians that working in Germany is no longer worthwhile.
The researchers at the Munich Ifo Institute refute this.
“The claim made by some politicians that those who only receive social benefits receive more net money than a low-income earner is simply wrong,” explained Andreas Peichl from the Ifo.
Citizens' money or work: which is worth it?
– Comparison of experts brings clear results
According to the institute, employment in Germany always leads to higher income than receiving citizen's benefit.
Anyone who goes to work and receives all the social benefits to which they are entitled always has more disposable income than someone who does not work and only receives social benefits.
The institute made its own calculations for this purpose.
A man on the way to the employment office (symbolic image).
© Sebastian Kahnert/dpa
It is impossible to get more without working because there are allowances for employed people when their income is offset against social benefits, “to prevent exactly that,” says Peichl.
Example calculation for citizen's benefit: Single receives 563 euros through support, but 891 euros through work
For its calculations comparing citizen benefit and work, the institute looked at different household constellations: single without children, single with two children, single-earner couple with two children and dual-earner couple with two children.
For example, a single person in a city with medium rent levels and a gross income of 1,000 euros gets 891 euros after deducting taxes and social security contributions and adding social benefits.
Anyone who only receives social benefits has 563 euros in citizen's benefit.
This effect is also clear among single parents.
More money through work for parents too: This is how citizens' money compares to work
Even in the case of a single person with two children, an employee receives 2,033 euros after deductions with a minimum income, while with citizen's benefit you only get 1,505 euros (depending on the age of the children).
The situation is similar for a single-earner couple with two children: They would receive 1,954 euros in citizen benefit, but at least 2,127 euros in income.
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A dual-earner couple would receive a maximum of 1,954 euros in citizen benefit, but an income of 2,159 euros.
With a higher gross salary, there is always a clearer discrepancy between a citizen's benefit and a possible income.
Debate about citizens' money: Merz criticizes, Heil defends support
Criticism of citizens' money came primarily from the opposition.
CDU leader Friedrich Merz criticized the “citizen’s money system” as “the opposite of what we need to promote employees’ willingness to perform again”.
Federal Labor Minister Hubertus Heil (SPD) defended the state's billions in spending on social welfare and especially citizens' money against criticism.
Since the introduction of the minimum wage in 2015, around two million people have been able to move up from the low-wage sector, said Heil.
Since then, the minimum wage has increased by 46 percent, and basic security has only increased by 41 percent.
“The introduction of citizen’s money has not changed the wage gap,” stated Heil.
More and more people are taking early retirement without any deductions.
A pension expert and economist is calling for the regulation to be withdrawn in order to keep people in work longer.
(cgsc)