According to the Ifo Institute, work brings higher incomes than doing nothing. However, additional social benefits must be used for this. Without money from the state, income can be lower than the citizen’s allowance.
Work is still worthwhile in Germany. With this assessment, the ifo Institute contradicts the widespread assessment that work in Germany is no longer worthwhile because of citizens’ money. “The claim made by some politicians that those who only receive social benefits receive more net than a low-income earner is simply wrong,” said the head of the ifo Center for Macroeconomics and Surveys, Andreas Peichl.
“This case is excluded because the allowances for employed people when counting income against social benefits exist to prevent exactly that,” added Ifo researcher Maximilian Blömer.
According to the scientists’ calculations, the prerequisite is that low-income earners also apply for the possibility of topping up their income through additional social benefits. Without money from the state, the pure income from work may actually be lower than the citizen’s benefit.
Researchers provide several Calculation examples on
According to the ifo Institute’s calculations, a single person in a city with a medium rent level like Dresden with a gross income of 1,000 euros can, with the help of additional social benefits, earn 891 euros net per month after deducting rent and heating costs. Anyone who doesn’t work and only receives social benefits has 563 euros in citizen’s benefit.
“Only if a single person with a gross income of 1,000 euros does not apply for any social benefits that he can receive, then he ends up with 357 euros net,” said economist Manuel Pannier from the Center for Economic Studies (CES) in Munich.
According to the Ifo, with a gross income of 2,000 euros, a single person can earn 1,020 euros net per month with social benefits; without social benefits it would be 965 euros. Both contributions are significantly higher than the citizen’s allowance of 563 euros.
According to the information, the same goes for single parents. Anyone who earns 1,000 euros gross will get 2,033 euros with social benefits – also more than someone without income and only with social benefits, who can expect 1,553 euros.
“However, if you do not apply for any social benefits, you will only end up with 622 euros gross of 1,000 euros,” says ifo researcher Lilly Fischer. The institute also made these calculations for couple households and different rent levels.