study
According to the Diakonie, basic child security costs far more money
Ulrich Lilie, President of Diakonie Germany, focuses on the medium and long-term burdens in the discussion about basic child security. photo
© Bernd von Jutrczenka/dpa
Bringing children out of poverty: If Family Minister Lisa Paus has her way, the basic child security system should succeed. It won’t be cheap. But a study now shows that child poverty also has its price.
Fighting child poverty is a mammoth task – and it takes a lot of money. Probably more money than the two billion euros that Finance Minister Christian Lindner (FDP) for the introduction of wants to spend basic child security.
According to a study, child poverty has a high price for the state and society. Accordingly, children affected by poverty have a higher risk of developing health problems and becoming unable to work than children from economically strong families. The direct and indirect costs associated with obesity alone, the risk of which increases with child poverty, amount to more than 60 billion euros a year, according to the German Institute for Economic Research (DIW) on behalf of Diakonie. In the long term, child poverty thus means higher public spending on health care and higher payments in the social security systems.
Diakonie presents reports
“In the discussion about basic child security, it’s not just the short-term constraints in the federal budget that should play a role,” said Diakonie President Ulrich Lilie at the presentation of the report. “We also need to talk about the medium- and long-term burdens on government and taxpayers that will inevitably result from not investing in all children at an early age.” After all, healthy and well-educated children have significantly better chances of building an independent life with higher incomes and less dependence on state aid.
With the basic child security, Family Minister Lisa Paus (Greens) wants to combine benefits for families and increase them at the same time. The FDP is critical of performance improvements. Finance Minister Christian Lindner told the “FAZ”: “A family of five who receive citizen income currently receives an estimated 36,000 to 38,000 euros a year from the taxpayer.” It doesn’t help much to pay them high additional transfers, be it 1,000 or even 3,000 euros a year.
How much the basic child security will now cost remains controversial. For the year 2025, when it is supposed to start, only two billion euros are currently earmarked. However, Paus initially demanded twelve billion euros per year and had recently assumed a maximum of seven billion euros in annual costs. According to a report by “Zeit online”, Paus’ draft law now talks of initially 3.5 billion euros. “The total costs for the period from January 1, 2025 to December 31, 2025 are 3.5 billion euros,” the paper says, according to the report.
At least 20 billion euros would be necessary
None of the sums are sufficient for the Diakonie: According to them, at least 20 billion euros would be necessary. “That’s a fraction of the sum that the state and taxpayers have to shoulder today if child poverty isn’t fought more energetically, but instead the enormous follow-up costs are accepted,” said Diakonie President Lilie.
The President of the German Institute for Economic Research (DIW Berlin), Marcel Fratzscher, is also pushing for the rapid introduction of basic child security. “I am very concerned that basic child security could fail for cost reasons,” said Fratzscher. “It would be a mistake to reduce spending on basic child security to two billion euros, as is currently planned in the federal budget.” The best investment a country can make is in its people.
Almost every fourth child is affected by poverty
According to data from the Federal Statistical Office, almost every fourth child is currently affected by poverty or social exclusion. Before inflation started, it was about every fifth child. Children of single parents are particularly affected: in 2022, 25.5 percent of single parent households were at risk of poverty. In the case of two adults with one child, on the other hand, it was 8.6 percent.
And according to the study, this also means high follow-up costs in the field of education: The often poorer access to educational opportunities for children affected by poverty leads to lower educational qualifications and limited career prospects. This in turn increases the risk of unemployment and means long-term social costs in the form of a lack of tax and social security contributions and additional transfer payments. “These costs amount to 1.5 billion euros a year for people from a year with insufficient education alone,” it continues.