Proposal Requested for Commission's Directive on a Regulation concerning specific aspects of the internal market

In a time of economic and financial hardship, the German government is set to undertake significant reforms in its social policy. The focus of these reforms will be on unemployment benefits, housing benefits, and child supplements, as announced by the Ministry of Social Affairs and spearheaded by the newly appointed Social State Commission (Sozialstaatskommission).

The commission, headed by Federal Minister Bärbel Bas, was officially launched today and is expected to deliver its proposals by the end of 2025. The reforms, if implemented from the beginning of 2026, aim to update the welfare state and make it more competitive, as advocated by CSU leader Markus Söder.

Söder believes that the welfare state needs a "fundamental update" to continue helping those in need while remaining competitive. He claims that these reforms could save many billions and has reaffirmed his demands for cuts in unemployment benefits and subsidies for heat pumps.

In line with Söder's proposals, the black-red coalition is planning to tighten certain aspects of unemployment benefits. This includes stricter rules for housing benefits and asset limits, as well as suggestions to tighten the reasonableness rule for job offers.

Lars Klingbeil, SPD co-party leader and Federal Finance Minister, has also expressed his views on the matter. He has stated that pressure should be increased on "total refusers" and sanctions should be tightened. Moreover, Klingbeil has expressed disapproval of someone receiving unemployment benefits while working black and enriching themselves at the expense of the general public.

The SPD, however, has shown some opposition to the claims that the welfare state cannot be financed, with both Bas and Klingbeil labelling such statements as "bullshit".

The debate over social policy reforms is a contentious issue, with Söder stating that the current form of the welfare state is unfair, with Germany spending 50 billion euros annually on unemployment benefits, half of which goes to people without German citizenship.

As the Social State Commission embarks on its mission, the future of Germany's social policy remains uncertain. However, one thing is clear: the welfare state is set for a significant overhaul in the coming years.