Increase in Ukrainian Supply Prices Remains Unabated
The German government is considering a draft bill from the Ministry of Social Affairs that proposes a change in the legal status of Ukrainian refugees, shifting them from receiving Citizen's Income (Bürgergeld) to Asylum Seekers' Benefits (Asylbewerberleistungen).
After interdepartmental consultation, the draft bill will be presented to the cabinet, following which it will be sent to the Bundestag for approval. The bill has already been made available to the German Press Agency.
The proposed change is expected to result in only minimal savings for the federal government. The difference in benefit amounts between the two categories is relatively small, with asylum seekers' benefits being about 100-120 euros less per person per month compared to Citizen's Income. This translates into savings of approximately €1.2 billion in 2026 and €350 million in 2027, significant but limited in comparison to the total social support expenditure.
Several factors contribute to these limited savings. The change applies only to Ukrainians arriving from April 1, 2025, excluding those who arrived earlier or under skilled worker or student migration programs. Additionally, the share of Ukrainian refugees employed in Germany remains comparatively low, maintaining higher reliance on social benefits. Furthermore, the total number of new arrivals is relatively smaller compared with the existing Ukrainian refugee population.
The costs for health services are not included in the projected savings of €1.32 billion in 2026. These additional costs will be incurred by states and municipalities but will be compensated by the federal government on a flat-rate basis. Estimated additional costs for benefits under the Asylum Seekers' Benefits Act are estimated at 1.375 billion euros in 2026.
It's important to note that the change in benefits will not affect the costs for health services. Ukrainian refugees retain the right to start working immediately under the new change.
The change in benefits for Ukrainian refugees is part of the plans by the black-red coalition. Minister Steffens has predicted that there would be no major savings due to the change in benefits for Ukrainian refugees. The government is also debating broader tougher rules on asylum applications and social assistance, indicating a multi-faceted strategy to reduce costs rather than relying solely on shifting benefit categories for Ukrainian refugees.
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- The proposed change in the legal status of Ukrainian refugees, from receiving Citizen's Income to Asylum Seekers' Benefits, is part of the broader plans in German politics, involving a multi-faceted strategy to reduce costs, including debating tougher rules on asylum applications and social assistance in the finance and political spheres.
- While the proposed change in benefits for Ukrainian refugees is expected to result in significant but limited savings for the German federal government, asylum seekers' benefits are only about 100-120 euros less per person per month compared to Citizen's Income, with additional costs for health services not included in the projected savings, according to recent news and financial reports.
