Proposal for a directive on commission's request regarding a proposed legislation

In the heart of Germany, a significant debate is unfolding concerning the future of the country's social welfare state. This discussion, taking place against the backdrop of challenging economic and financial conditions, has seen various political leaders advocating for reforms to modernise and simplify social welfare benefits.

The Sozialstaatskommission (Social State Commission), a government-appointed body, was established in September 2025 to develop proposals for reforms in unemployment benefits, housing allowances, and child supplements. The commission, scheduled to complete its work by the end of 2025, aims to implement these reforms from early 2026.

Lars Klingbeil, the SPD's co-party leader and Federal Finance Minister, is among those supporting certain tightening of unemployment benefits. He has expressed concern about individuals receiving unemployment benefits while working black and enriching themselves at the public's expense. Klingbeil also suggests increasing pressure on "total refusers" and tightening sanctions.

The Bavarian Minister-President, Markus Söder, has been a vocal advocate for "hard reforms" in social policy. He believes these reforms are necessary to maintain competitiveness and continue helping those in need. Söder has demanded cuts to unemployment benefits and subsidies for heat pumps, as well as tightening the reasonableness rule for job offers and stricter rules for housing benefits and asset limits.

Chancellor Friedrich Merz (CDU) has also joined the call for sweeping social reforms, reiterating his analysis that the current welfare system is unsustainable with current earnings. He has announced the implementation of these reforms from the beginning of 2026.

The SPD, while supporting reforms in the areas of housing benefits and child supplement, has not yet provided specific details. The party, however, has been critical of the financial argument for reforming the welfare state, with SPD leader Barbara Bas labelling it as "bullshit".

The debate over social welfare reforms in Germany is far from over. As the Sozialstaatskommission continues its work and the black-red coalition aims for several laws for social system reforms in the fall, it remains to be seen what changes will be made to the country's social welfare system.

One notable statistic that has come to light during this debate is that Germany currently spends 50 billion euros a year on unemployment benefits, with half of this amount going to people without German citizenship. This figure underscores the need for reforms to ensure that benefits are distributed effectively and equitably.

As the discussion on social welfare reforms continues, one thing is clear: Germany's social welfare state is at a crossroads, and the decisions made in the coming months will have lasting implications for the country's citizens and economy.

Proposal for a directive on commission's request regarding a proposed legislation