Federal Finance Minister Christian Lindner has announced plans to revise the legal status of Ukrainian refugees and implement significant changes to housing cost coverage, aiming to reduce government spending on benefits, including citizen benefits, provided to Ukrainian refugees. Lindner told Business Week that the goal is to “lower citizen benefit costs and help more beneficiaries enter the labor market. Ukrainian refugees should be given a distinct legal status.”
The Finance Minister’s plan aims to integrate asylum seeker benefits with the labor market. As a result, asylum seekers from Ukraine will not go through the asylum procedure and will not automatically qualify for the citizen’s benefit, which offers economic and social support even if they are not employed.
The Finance Minister’s plan also proposes a flat-rate reimbursement for housing costs, replacing the current system based on actual expenses. “This way, benefit recipients can decide for themselves whether to move to a smaller apartment or manage heating costs differently,” Lindner explains. “I believe this could save us billions of euros.”
Ukrainian refugees in Germany enjoy a special status, with municipalities covering housing and heating costs for recipients of citizen benefits and their families, a measure supported by the federal government. Ukrainians are subject to a waiting period during their first year of eligibility for citizen benefits, and the adequacy of accommodation costs is not checked to give asylum seekers the flexibility to seek job opportunities. However, heating costs are covered immediately, provided the amount is reasonable.
According to the Ministry of Labor, many recipients of the Citizen’s Allowance are long-term dependent on state aid. Approximately half of these individuals still rely on state support six months after starting work, primarily due to structural issues like low wages and part-time employment. “There is no evidence that the citizen’s allowance encourages people to return to benefits after a brief period,” Hill stated. He further noted that many employed individuals continue to depend on benefits long-term, as their income is insufficient to cover living expenses, particularly for families with children.
A spokesperson for the Ministry of Labor informed the German Press Agency that “the majority of individuals receiving citizen benefits who have integrated into society continue to work,” noting that 64% maintain employment after six months. The Ministry of Labor also indicated that individuals with vocational training are more likely to remain employed and frequently cease receiving citizen benefits. Additionally, it is generally easier for single individuals to find sustained employment compared to those with children.
