Overview
- The Arbeiterwohlfahrt presented its plan and an Ifo‑Institut study on Wednesday that model a merger of Grundsicherung, Wohngeld and Kinderzuschlag into a single benefit to simplify access and cut bureaucracy.
- The Ifo analysis finds the AWO model would raise disposable incomes for the lowest earners by up to about €515 per year, bring roughly 322,000 people into work and lower the at‑risk‑of‑poverty rate by 0.9 percentage points.
- Core design features include using one uniform income concept, keeping or enlarging small‑earnings protections, adding a €100 per‑person 'Erwerbsbooster' for social‑security jobs and extra allowances for single parents.
- The reform would add roughly €5.4 billion a year in public spending and the AWO suggests partly offsetting costs by scaling back tax‑favoured child allowances to raise about €3 billion, a financing route that is politically contentious.
- The federal labour ministry plans to publish its own consolidation concept this autumn with legislation targeted for summer 2027, and parties such as Die Linke broadly support bundling while warning against cuts to housing support and local budget strains.