Refugees from Ukraine: the federal government pays billions to the states

Late Thursday evening, the federal and state governments agreed on the distribution of the costs for the accommodation and care of refugees from Ukraine. In a meeting lasting several hours, the Prime Ministers, Chancellor Olaf Scholz (SPD) and the responsible ministers agreed that the Ukraine refugees should receive basic security benefits from June onwards – i.e. at the level of Hartz IV or basic security in old age. The alternative would have been, just as with other refugees, to initially only pay the lower benefits from the Asylum Seekers Benefits Act until the asylum decision was made.

Scholz said after the meeting that the decision had created the basis for the country to stand together and now concentrate on the concrete task of integration.

The federal government bears the cost of basic security. In the run-up to the prime ministers’ conference, however, it was disputed what share of the accommodation costs the federal level would assume. The federal states demanded 100 percent, analogous to the regulation after 2015, when a total of more than one million people fled to Germany. However, this exception expired at the end of last year; since then, the federal government has only taken on 75 percent. Scholz spoke of the federal government taking over “the largest part”.

North Rhine-Westphalian Prime Minister Hendrik Wüst (CDU), currently chairman of the Prime Ministers’ Conference, said after the meeting that some states “of course could have imagined even greater support from the federal government”. Nevertheless, he spoke of a viable compromise.

The federal states will receive a lump sum of two billion euros this year

Berlin’s governing mayor Franziska Giffey (SPD) said that this time the federal and state governments had done much better than with the refugee movements of the past. The regulation will mean “that people can arrive well here,” explained Giffey. However, the countries did not assume that it was “fully comprehensive financing”.

In addition to including the refugees in the basic security system, the federal government has agreed to make a flat rate of two billion euros available this year. EUR 500 million of this is intended as a kind of advance payment for the federal states, for the time until the change to the legal sphere of the Social Security Code II, i.e. to basic security, is completed. Another 500 million should support the municipalities with the accommodation costs. According to the decision paper, the remaining billion is intended as a contribution “to the other costs of the countries”, “e.g. for childcare and schooling as well as health and care costs”.

The costs associated with the Ukraine war are to be absorbed in a supplementary budget, for which the federal government wants to take on additional debt and pull the exception clause of the debt brake.

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