The German Federal Government has finalized its 10-point plan aimed at combating the misuse of social benefits, centering on closer data exchange and new legislative provisions, as announced by Interior Minister Alexander Dobrindt (CSU) and State Secretary Leonie Gebers (SPD) on Wednesday.
A major operational change involves automation. For the past two months, Jobcenters have been automatically notified by the Federal Ministry of Labour and Social Affairs (BMAS) whenever a recipient’s legal residency status changes. If, for example, the right to freedom of employment is revoked, the Jobcenter will receive a “push notification” to determine if benefits need to be adjusted or stopped, a process that previously required authorities to manually request the information. This automated data exchange is intended to play a much larger role in fighting benefit fraud, and a system for automatic sharing of active arrest warrants is also set to be implemented.
New sanctions are being formalized for individuals who evade custody after a final conviction. Benefits under the Citizen’s Income (Bürgergeld) and basic security (Grundsicherung) will henceforth be disallowed if a person has an outstanding arrest warrant for failing to appear in court. This requires amendments to the Social Code II and XII. The BMAS indicates that the legal process for this change will begin shortly, and authorities will concurrently be automatically alerted when such a warrant is issued.
The government is also introducing stricter guidelines for dealing with fraudulent claims regarding the right to freedom of employment. The ministries plan to issue new technical instructions and guidelines for Jobcenters and immigration offices. This addresses cases where people work for only a few hours and still qualify for social benefits. For very low weekly hours, such as 15 hours, authorities will conduct more intensive checks to determine if a genuine employment relationship exists or if the employment is merely nominal. The government emphasized, however, that these must still be case-by-case reviews.
On the international stage, the German government aims to press for the explicit inclusion of the improper use of freedom of employment and social benefit systems as punishable offenses at the EU level. The government intends to lobby the European Commission to prevent situations where minimal employment triggers eligibility for social benefits on a European level.
Furthermore, existing legal frameworks are being strengthened. Effective July 1st, employer liability under the SGB II has been introduced, meaning employers can be held responsible for improperly paid social benefits if employees were not reported or not fully reported to social security, leading to unauthorized payments. The BMAS plans to extend this rule to the basic security (SGB XII). Additionally, cooperation between Jobcenters and the Customs Financial Control against Black Market Activities has been made mandatory: Jobcenters must report suspected cases, while Customs will inform Jobcenters of the results of its own investigations.
The Federal Agency for Employment will also be strengthened in the fight against organized benefit fraud through the establishment of a central competence center and five regional offices.
The plan also focuses on addressing “dump properties.” The Federal Ministry of the Interior (BMI) noted that criminal networks sometimes exploit heavily occupied or nearly uninhabitable properties to extract inflated rent payments from social benefits. A revision of the Building Code, already discussed in the Bundestag, is intended to enable municipalities to take stronger action, including simplified rights of first refusal and, in severe cases, eminent domain.
There will also be expanded support for victims of labor exploitation, enhancing the existing “Fair Mobility” counseling service. Legislation is planned to ensure that victims of labor exploitation are socially secured, particularly during criminal proceedings, if they testify against perpetrators and thereby enable prosecution.
The Action Plan was approved by the Federal Cabinet on Wednesday morning and comprises ten areas of action, specifically targeting organized social benefit fraud linked to EU immigration. State Secretary Leonie Gebers stressed during the press conference that the government recognizes its continued reliance on foreign workers and does not fundamentally challenge freedom of employment within the EU. Rather, she stated that the focus must be on fighting the abusive exploitation of workers and the misuse of these rights.
