Increased social assistance spending to reach EUR 20.2 billion by the year 2024
In 2024, social welfare agencies in Germany are set to spend a net total of 20.2 billion euros, marking a significant increase from the previous year. This surge in spending is primarily driven by several key factors, including an aging population, rising unemployment, increased costs of healthcare and long-term care, economic stagnation, and structural challenges.
An Aging Population and Increasing Demand
With about 6 million Germans currently over the age of 80, this number is expected to grow to 10 million by 2050. This demographic shift increases the demand for pensions, medical services, and long-term care, thereby driving up social welfare costs.
Rising Unemployment and Increased Welfare Expenditure
Higher unemployment rates result in more people requiring unemployment benefits and income support, further driving up welfare expenditures.
Increased Spending on Basic Income Support and Nursing Care
In 2024, expenditure on basic income support and nursing care grew by 14.8%, totaling €20.2 billion. Most of this was spent on pensioners and those unable to work.
Economic Stagnation and Structural Challenges
Germany faces various difficulties, such as high energy costs due to sanctions, transition to new environmental standards, tariff conflicts, and supply chain disruptions, negatively impacting economic growth and tax revenues, which in turn limits funding capacity for welfare programs.
Other Factors Contributing to the Surge in Spending
Social spending, excluding generous unemployment benefits like the Bürgergeld scheme costing €43 billion in 2025, marks an even larger total welfare spending. The German Chancellor has declared the current welfare model financially unsustainable, indicating the need for reform.
Breakdown of Spending in 2024
- Basic security in old age and cases of reduced earning capacity: 11.4 billion euros
- Assistance for living expenses: 1.6 billion euros, an increase of 11.1%
- Net spending on care assistance: 5.3 billion euros, an increase of 17.7%
- Assistance for health, overcoming special social difficulties, and in other situations: 1.9 billion euros, an increase of 19.4%
Integration Assistance for People with Disabilities
Integration assistance for people with disabilities was recorded separately from other social welfare spending. In 2023, a total of 28.7 billion euros was spent, an increase of 12.9% compared to the previous year.
The Impact on Public Budgets
With social welfare spending significantly increasing in the past year, and all individual benefit types under the twelfth book of the Social Code having increased, this surge is causing public budgets to be strained. Calls for reform and tax adjustments are growing as a result.
The community and employment policies need to address the rising unemployment rates and increased welfare expenditure to alleviate the strain on public budgets caused by the surge in social welfare spending in 2024. The finance minister should consider the growing demand for basic income support, nursing care, and integration assistance for people with disabilities when formulating the business strategies for the upcoming years.
