The German government is stepping up its efforts against fraudulent claims for social benefits. The Federal Cabinet adopted an action plan in Berlin on Wednesday containing measures aimed primarily at social benefit abuse involving migrants from EU countries. Such abuse is now to be made more difficult through increased data matching, stricter checks and tighter rules. Another new measure would end the payment of basic income support to people who are wanted under an enforceable arrest warrant.
“Social security systems must not be exploited,” Chancellor Friedrich Merz (CDU) wrote on the social media platform X. “With our action plan, we are combating exploitation and abuse.” Federal Interior Minister Alexander Dobrindt (CSU) said: “Criminal structures are trying to make the welfare state their prey. We are responding to this with the action plan, taking a clear stance against social benefit fraudsters and organised crime.” Federal Labour Minister Bärbel Bas (SPD) said: “Social benefit abuse harms society and weakens confidence in the welfare state.”
According to the ministry, data sharing between authorities is to be improved in order to close loopholes and identify social benefit fraudsters more quickly. Municipalities are to be given greater powers to take action against so-called “scrap properties”. Those behind “organised exploitation” are to be held more accountable. Employers who rely on undeclared work are also to face greater liability. According to the action plan, the measures adopted are to be implemented by the end of the year.
Dobrindt said that a “decisive” element of the tougher approach would be future data sharing between social welfare, financial and security authorities. “What sounds self-evident is anything but self-evident,” he said.
In future, for example, the Central Register of Foreigners is to be able to send push notifications to authorities responsible for benefit payments so that payments can be stopped immediately if there is suspicion of an unlawful claim. According to a government spokesperson, the new rules will allow comprehensive data sharing between social welfare offices, immigration authorities, registration authorities, financial and security authorities, building authorities, health insurance funds and long-term care insurance funds.
One common fraud model involves organised gangs bringing people affected by poverty from southeastern European EU countries to Germany, housing them in so-called “scrap properties”, providing them with fictitious employment contracts and then claiming social benefits such as child benefit or rent subsidies.
Leonie Gebers (SPD), State Secretary at the Federal Ministry of Labour and Social Affairs, described people at the presentation of the action plan who are “crammed into dilapidated properties, whose hardship and misery are exploited to collect social benefits, which then frequently end up in the pockets of criminal figures behind the schemes”.
The Federal Ministry of Housing stressed that action against so-called “scrap properties” could also involve expropriation. Municipalities would in future be able to “gain access to neglected buildings more easily, exercise their right of first refusal more easily and, as a last resort, also expropriate properties if owners refuse to maintain their houses despite an official order to do so”, Federal Housing Minister Verena Hubertz (SPD) explained. “People who have to live there suffer from scrap properties, as does the entire neighbourhood,” she said.
The new rules are also intended to make it possible to withdraw basic income support from people wanted under an arrest warrant. According to the federal government, this would particularly affect offenders who have been legally convicted and sentenced to imprisonment but evade starting their sentence despite having been ordered to report for custody.
A spokesperson for the Federal Ministry of Labour and Social Affairs stressed on Wednesday that those affected would continue to be entitled to basic provisions — but only after entering a correctional facility.
Interior Minister Dobrindt expressed his incomprehension that offenders who had gone into hiding had previously continued to receive social benefits. “Quite rightly, there is a great deal of outrage about this situation,” he said. “We are putting an end to it.”
The Ruhr region is considered a regional hotspot for social benefit fraud involving migrants from other EU countries. It is the home region of Minister Bas, who represents the Duisburg constituency in the Bundestag. At the beginning of her term in office, Bas had already announced measures to combat social benefit fraud and has regularly held discussions with affected municipalities.
The Federal Ministry of Labour and Social Affairs said that “more and more municipalities are reporting significant problems with some groups of migrants from EU countries”. According to the ministry, these groups claim social benefits by invoking EU freedom of movement, but are “only employed to a very limited extent or registered in fictitious employment relationships” and have “very few qualifications and language skills”.
The ministry stressed that benefit recipients are “frequently themselves victims of criminally organised structures that often resemble human trafficking”.
Watch our video to learn how social benefit fraud is carried out in Germany and how the government plans to tackle it.
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