Amid discussions regarding reforms to the social welfare system, economist Georg Cremer is calling for changes to the current crediting systems for low-income earners. Cremer suggested that individuals with limited incomes should continue to benefit from state aid for longer periods. Speaking to the “Neue Osnabrücker Zeitung” he stated that a plausible target would be ensuring that at least 30 cents of every additional euro earned remains with the family. The commission for social welfare reform has also utilized corresponding calculations from the Ifo Institute. Cremer, who served as the former Secretary General of Caritas and is a member of the federal government’s pension commission, highlighted that current social benefits, such as housing allowance or child supplements, primarily affect single parents and large families whose gross income falls between €3,000 and €5,000. He noted that the resulting difference in disposable income is often negligible, amounting to only 100 or 200 euros, which he described as profoundly frustrating. Such a reform is estimated to cost between two and three billion euros.
Economy / Finance
