The Bundesrat (Federal Council, ‘Upper House’) has approved the far-reaching reform of the current social assistance system, the Bürgergeld scheme, thereby paving the way for the introduction of a new basic income for jobseekers (Grundsicherung für Arbeitssuchende). The new scheme is based on a law passed by the Bundesregierung (German government) and is intended to gradually replace the existing benefit.
It is important for cross-border workers to note that, although entitlement to social assistance benefits in their country of residence is generally (very) limited, there are, in principle, possibilities under certain conditions (see the end of the article for the rules applicable in Germany).
Following approval by the Bundestag and the Bundesrat, the reform is now considered to have been definitively adopted. The legislative amendments will largely come into force on 1 July 2026.
Objectives of the reform: more mediation, a stronger obligation to cooperate
With the introduction of the new Grundsicherung, the Federal Government aims to focus the existing system more strongly on labour market integration. Central to this are the principle of ‘Forderns und Förderns’ (encouraging and supporting) and a closer link between support and personal responsibility.
At the heart of the reform is a greater emphasis on job placement. In future, job centres must assess even more rigorously whether claimants can be placed in work immediately. Only when this is not possible will training and upskilling measures be considered.
Changes to obligations and sanctions
The reform also provides for a tightening of the obligations to cooperate. Beneficiaries will be subject to a stronger obligation to actively cooperate in their integration into the labour market.
Stricter sanctions may be imposed for breaches of these obligations, including a more severe and longer reduction in benefits. Repeated failure to attend appointments or refusal of suitable work may also be penalised more consistently.
Implementation and entry into force
The new Grundsicherung will gradually replace the existing Bürgergeld. In addition to the name change of the benefit, extensive amendments to the Zweite Buch Sozialgesetzbuch (SGB II, Book II of the German Social Code) are foreseen.
The Federal Government plans a phased introduction, with the majority of the rules coming into force from July 2026.
Point to note for EU citizens
In principle, the German Grundsicherung cannot be transferred to another EU Member State. Furthermore, EU citizens who are residing in Germany solely for the purpose of seeking work and who have not worked there for a sufficient period are, in principle, only entitled to benefits under SGB II (Grundsicherung) and SGB XII (Sozialhilfe – social assistance) after five years of lawful residence.
At the same time, it follows from the case law of the Court of Justice of the European Union that an application for social assistance does not automatically lead to the loss of the right of residence. German authorities must always assess the individual situation first. Further information on this can be found on the website of the EU Equal Treatment Body.
More information
More information on the reform can be found on the Federal Government’s website.