Spending on social welfare in Germany rose significantly in 2020, according to new figures from the Federal Statistical Office (Destatis). 

Half of social welfare spending in Germany goes on social assistance

Spending on social welfare (Sozialhilfe) - a collection of benefits within the social security system in Germany that are designed to ensure basic subsistence for those in need - increased by 6,5 percent in 2020, the latest data from Destatis shows. Accordingly, last year social welfare providers spent a total of 14,4 billion euros on benefits. 

More than half of this (63 percent), or approximately 7,6 billion euros, was spent on social assistance payments for pensioners and disabled people whose own income is insufficient to support themselves. That is an increase of 10,1 percent compared to 2019. 

Biggest increase in spending on care

However, the largest percentage increase compared to the previous year was recorded in care assistance, for which spending rose by 14 percent compared to 2019, to 4,3 billion euros. This benefit is given to senior citizens who cannot afford the cost of their care from their own resources, including benefits from long-term care insurance. 

One reason for the sharp rise in nursing care spending is likely a reform, passed at the end of 2019, which relieved the burden on the families of those in need of care. The law stipulates that children no longer have to step in to cover the cost of their parent’s care if their annual income is less than 100.000 euros. 

The impact of a reform to long-term care insurance, which will see childless people hit with higher contribution rates from 2022 onwards, will not become clear for a few years. Although the reform is designed to reduce the burden of care spending on the government, the reform also includes new collective bargaining agreements, which are supposed to drive up the wages of nursing staff, meaning that the increase in costs is likely to further accelerate in the future.