For months, the Greens and FDP have been at odds over basic child security, and now the conflict has reached a new high. Finance Minister Christian Lindner (FDP) has only set two billion euros a year for the reform in his medium-term financial planning, a fraction of the twelve billion that Family Minister Lisa Paus (Greens) is calling for. Negotiations are still ongoing, but the budget and planning for the coming years should be decided next Wednesday. The most important aspects of the dispute.
Why should there be basic child security at all?
Every fifth child in Germany is considered to be at risk of poverty, while at the same time state aid for children and young people often does not reach them. According to experts, this is mostly due to the fact that the offers of help are confusing, the parents have to submit numerous applications and the authorities also offset the benefits among themselves and against income. Additional income or government support in one place is then deducted from another. For this reason, the wide range of state aid for families, from child benefit to child allowance for poorer families and basic income, should be bundled, simplified and made digitally accessible.
The amount of previous support is also disputed. The Greens, SPD and Left think they are too low. Children and young people would experience exclusion and would have poorer educational opportunities. Therefore, the state must help with higher social benefits.
What is the dispute about?
Mainly about the cost. Family Minister Paus has announced an additional need of at least twelve billion euros for 2025, when basic child security is to come into force. Lindner only wants to plan two billion – for 2025 and the following years up to 2027. That is even less than in spring, when he still spoke of two to three billion euros. According to financial planning, the FDP chairman only wants to spend money on digitizing the procedures, i.e. on new IT in the authorities, software and the like, and on ensuring that a larger proportion of those entitled to help actually apply for it. Paus, on the other hand, wants to expand the aid, and poorer families in particular should receive significantly more money.
How did Family Minister Paus come up with the twelve billion euros?
This is not entirely clear, because Paus has still not submitted a fully calculated concept. However, she outlined the elements that would cost a lot of money: First, the socio-cultural subsistence level of children should be recalculated. Paus expects a higher lower limit, which would mean that poorer families would receive more money. Secondly, it should be more worthwhile for parents and young people to work. A higher income would then result in fewer deductions from social benefits than before, and the state would continue to transfer more money. Thirdly, the aid should be digitized and paid out automatically, i.e. no longer on request, but independently by the authority. This should also give those who previously did without it the same service. Paus estimates that they are two-thirds of those entitled. This item alone, Paus said at the end of April, is estimated to add up to an extra five billion euros. Fourth, the digitization of the offices and the procedure costs money.
How could the reform be financed?
This question is particularly difficult because with the return to the debt brake, savings will have to be made in many areas anyway. According to the Ministry for Family Affairs and the SPD parliamentary group, part of the costs could come from the reduction in the child tax allowance. As a result, rich parents save up to 100 euros more per month than parents with lower incomes receive in child benefit. Lindner rejects this as a factual tax increase.
What do the Greens and SPD say about Lindner’s plans?
The Greens made it clear on Monday that two billion euros will by no means be enough. “It is relatively clear that we cannot curb child poverty with two billion euros,” said party leader Omid Nouripour. In the end, the coalition for financing basic child security must agree on a higher number. He was glad that the Minister of Finance had only described the number listed in the budget as a memorandum. The SPD held back on Monday, but supports the project, party leader Saskia Esken in particular has demanded more money for basic child security, and the SPD parliamentary group is also demanding a comprehensive reform. However, the Social Democrats have not committed themselves to the sum of what it may cost. Chancellor Olaf Scholz (SPD) supports the project in principle, but is also covered when it comes to the budget. Internally, he is said to have pushed for a reduction in the cost of the reform.
How does it go from here?
Chancellor Scholz has taken on the issue and, according to his own statements, is working on an agreement. In a letter to the Federal Minister for Family Affairs, from which ARD quotes, Scholz announced on Monday that the government would reach an agreement on the overall concept by the end of August. At the same time, he wrote of an “intended improvement in performance” for basic child security, which seems to mean that he is accommodating Paus and her position. The Minister for Family Affairs reacted accordingly in a statement on Monday evening: She was “grateful to Chancellor Scholz that his decision clarified the basic child security”. The basic child security will “come as an important joint socio-political reform of the federal government”. The chancellor also “made it clear that it must be an effective service,” said Paus. What exactly this means for the future financing of the project remains open.