Increased Spending on Social Assistance Reaches a High Point
In a recent report by the Federal Statistical Office in Wiesbaden, it has been revealed that Germany's social welfare spending for 2024 has seen a substantial rise across multiple assistance categories.
The total net expenditures under the Social Code Book XII (SGB XII) rose by approximately 14.8% to 20.2 billion euros compared to the previous year. This increase was primarily driven by the need for additional support in areas such as basic income support for the elderly and those with reduced earning capacity, long-term care assistance, and assistance for subsistence needs.
The largest share of spending, accounting for 56.5% of the total, was allocated to basic security in old age and cases of reduced earning capacity. This category saw an increase of 13.3%, with expenditure reaching 11.4 billion euros.
Long-term care assistance also witnessed a significant rise, with spending increasing by 17.7% to 5.3 billion euros. The category of assistance for living expenses saw an 11.1% increase, reaching 1.6 billion euros.
Additional assistance covering health-related support, overcoming social difficulties, and other life situations also saw a notable increase of 19.4% to 1.9 billion euros.
Separately, integration assistance for persons with disabilities, regulated under a different legal framework (SGB IX), also increased by 12.9% to 28.7 billion euros in 2024.
These increases indicate a clear trend of growing expenditures in social welfare obligations across basic security, care, and living assistance, driven by demographic changes and social demand pressures in Germany.
It is worth noting that Germany's unemployment rate has been relatively high in 2024-2025, with the number of unemployed nearing 3 million. This may have contributed to the need for increased social assistance. However, inflation in 2025 has moderated to around 2%, which may affect living costs and welfare needs but does not offset the overall increase in social spending.
[1] Source: Federal Statistical Office, Wiesbaden [3] Source: German Federal Employment Agency [5] Source: Deutsche Bundesbank
- In contrast to the rising social welfare spending, the personal-finance sector might experience a shift as increasing expenditures could divert funds away from investments in the finance industry and business.
- As the need for social welfare assistance continues to grow, individuals may require more guidance from financial advisors in managing their personal-finance to ensure they maintain a stable economic standpoint amidst the financial industry's challenges.
