Germany's Bundestag has approved a sweeping welfare reform that will replace the existing Citizen's Benefit (Bürgergeld) with a new basic income support scheme, known as Grundsicherungsgeld. The legislation passed on Thursday with 320 votes in favour and 268 against, with two abstentions from within the SPD. The reform, pushed through by the ruling CDU/CSU-SPD coalition, aims to make the welfare system "more targeted and fairer" while bringing more people into employment and curbing the misuse of social benefits.
Chancellor Friedrich Merz (CDU) welcomed the decision. "The principle of 'support and demand' applies," he wrote on X. "All those who can work should actually work. That is a question of social justice in our country." Labour Minister Bärbel Bas (SPD) called it "a good reform that helps people who need support and with which we expect greater participation," describing it as "socially just and economically sensible."
The reform introduces a series of concrete changes to Germany's social security framework. The Bürgergeld benefit will be renamed Grundsicherungsgeld. The principle of job placement as the first priority will be reinstated, meaning authorities will first check whether immediate placement in work is possible before considering qualification or further training measures. This applies in particular to those under 30.
Those who are able to work will be required to use their labour capacity to the maximum extent possible, with the goal of eliminating the need for state support entirely. Single individuals will in particular be required to work full time where this is deemed reasonable. Parents will be expected to be available for work or integration measures once their child reaches 14 months of age, a significant tightening from the previous threshold of three years.
People with health limitations are to receive more targeted support, and young people in complex personal circumstances will benefit from more comprehensive advice and assistance, with gaps in support closed and youth employment agencies strengthened.
The reform introduces significantly stricter obligations and consequences for those who do not cooperate with jobcentres. Missing the first jobcentre appointment will carry no immediate consequences, but from the second missed appointment, benefits will be cut by 30 percent for one month. Those who miss three consecutive appointments face a graduated procedure that can ultimately result in the complete loss of entitlement to benefits, including housing costs.
Those who abandon a support measure or fail to apply for jobs will face steeper benefit reductions than under the current system, with standard payments cut by 30 percent for three months at a time. The so-called work refusal rule is also being made more effective and applicable at an earlier stage, with standard benefits able to be withdrawn for at least one month and up to a maximum of two months.
The previously existing one-year grace period on asset assessments will be abolished. Instead, the level of protected assets will be tied to the applicant's age. Housing costs will also be capped, including during a one-year transition period, at one and a half times the general adequacy threshold.
The reform has passed against a backdrop of significant opposition both inside and outside the Bundestag. CDU Secretary General Carsten Linnemann argued in the parliamentary debate that the welfare state had become "no longer fair in some areas" and that the reform would ensure people were brought into work "rather than managing unemployment."
But criticism from the opposition was sharp. Left Party parliamentary leader Sören Pellmann said the coalition was "betting on mistrust rather than trust," and that the law was tearing apart "the important security promise of our welfare state." For the Greens, MP Timon Dzienus said the legislation showed a "fundamental distrust of one's own population" and would hit families, single parents and children hardest.
Trade unions and social organisations were equally critical. IG Metall's social affairs board member Hans-Jürgen Urban said the increased pressure was aimed at "a vanishingly small group of so-called total refusers" but would affect everyone. "Millions of people and their families are being placed under general suspicion without being offered realistic opportunities for qualification and employment that secures their existence," he said.
The service sector union Verdi called the reform a "socially and labour market politically fatal step backwards" that would push people "further into poverty and precarious employment." The VdK social association criticised in particular the planned cap on housing costs, warning it risked rent arrears and could "in the worst case lead to homelessness," a concern echoed by both the Diakonie Deutschland welfare organisation and the SoVD social association.
The law does not require the approval of the Bundesrat, though the upper house could refer it to a mediation committee at its session on 27 March. A second piece of legislation requiring Bundesrat approval is planned to address structural questions, though the Labour Ministry said no details or timeline for that legislation could be provided at this stage. The new system is set to come into force gradually from 1 July 2026.
Currently around 5.5 million people receive Bürgergeld, including approximately 800,000 so-called top-up recipients whose wages fall below the benefit level. Expenditure on the scheme reached 51.7 billion euros in 2024.
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