Overview
- The Arbeiterwohlfahrt publicly endorsed merging Bürgergeld, Wohngeld and Kinderzuschlag and published an Ifo-Institut study that models the AWO consolidation design.
- The Ifo study, released on Wednesday, August 19, 2026, estimates the reform would lower the at‑risk‑of‑poverty rate by 0.9 percentage points and raise disposable income for the poorest households by up to €515 per year.
- Researchers project the package could bring roughly 322,000 people into employment and add about 188,000 full‑time equivalent working hours, driven by targeted incentives in the AWO plan.
- The model is estimated to cost about €5.4 billion a year and the AWO proposes funding ideas such as scaling back preferential tax treatment for wealthier families to raise roughly €3 billion.
- Political reaction is cautious: Die Linke supports consolidation but warns against cuts to housing aid, while the federal ministry says it will present its own consolidation concept this autumn and has not adopted AWO details.