German lawmakers back major welfare bill with tougher sanctions

Germany's lower house of parliament on Thursday passed a landmark welfare bill, introducing a new unemployment benefit that includes the possibility of tougher sanctions on claimants.

The new benefit, dubbed "basic income support for jobseekers," is set to replace the existing "citizen's benefit," which is claimed by around 5.5 million people.

"The welfare state is no longer fair in some areas," said Carsten Linnemann, general secretary of Chancellor Friedrich Merz's Christian Democratic Union (CDU). "We must do everything we can to get people back to work instead of managing unemployment."

In future, recipients who are able to work will be required to use their labour "to the maximum extent reasonable."

The "citizen's benefit" was introduced by the previous German government in 2023, but faced heavy criticism from Merz's conservatives.

Reforms to the system were a key plank of Merz's coalition agreement with the centre-left Social Democrats (SPD) following parliamentary elections early last year.

The new measure would allow officials to reduce welfare payments by 30% for three months if recipients do not apply for positions, fail to attend job centre appointments or refuse to attend courses, with a further threat of complete cancellation.

Authorities must first give those affected the opportunity to be heard by telephone or in person before employing sanctions, while people with mental health issues should be spared.

The sanctions are expected to affect only a fraction of those entitled to benefits, less than 30,000 per month on average.

The bill must still pass the Bundesrat, Germany's upper house, before taking force as early as July 2026.