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How will the 2024 budget affect foreigners in Germany?

Foreigners living in Germany will see some social services increasing in 2024 - but also grapple with budget cuts in core areas of their everyday lives. We lay out what to expect.

Published: 21 September 2023 17:14 CEST
A piggy bank
A German piggy bank with euro notes. Photo: picture alliance/dpa/dpa-Zentralbild | Patrick Pleul

Over the summer, Germany approved its much debated budget for 2024, which is to be officially adopted in November.

Some expenditures are increasing, namely those for defence. The German government has already set aside €51.8 billion in military spending for 2024, up from €50 billion this year. This puts it at the NATO-set target of two percent of each member state’s GDP.

The Bundesrepublik has for years been criticised that it did not meet this quota, but for the first time is set to – and even exceed it – as it increasingly strives to revamp its flailing Bundeswehr and lend more support to Ukraine.

But to budget for this increase – among others – without going into debt, it’s also cutting certain services which affect foreigners in Germany. Here’s what you need to know.

READ ALSO: German government approves belt tightening budget for 2024

Elterngeld is being halved

Many move to Germany for higher paying jobs which the country offers, particularly in STEM fields. But couples and individuals who have a taxable income of more than €150,000 per year will no longer qualify for Elterngeld (parental allowance) when they go on parental leave.

Previously the benefit was available to couples earning less than €300,000, or €250,000 for single parents. The move is expected to affect around 60,000 families in Germany.

READ ALSO: ‘A horrible idea’: How cuts to Elterngeld will affect families in Germany 

Less funding for trains

For years the German government has vowed to refurbish its rail services, which are notorious for their frequent delays and cancellations. It had even set aside €45 billion for Deutsche Bahn in a far-reaching climate package passed in March. Yet the government has now said it will currently only fund the rail service “as far as financially feasible”.

For environmentalists, this was a double whammy as the budget still includes tax breaks for motorists – something which the Green Party has pushed Finance Minister Christian Lindner (FDP) to scratch out. 

But train enthusiasts looking to explore Germany and beyond can still look forward to speedy services coming out in the coming months, often in partnership with Austrian and French rail lines. And despite talk of raising the price, the Deutschlandticket is still set to be available for just €49 a month (at least for the moment).

The Inter City Express, ICE 4, of Deutsche Bahn, arrives at Interlaken Ost station in Bern.

The Inter City Express, ICE 4, of Deutsche Bahn, arrives at Interlaken Ost station in Bern. Photo: picture alliance/dpa/KEYSTONE | Peter Schneider

Reducing funds for digital services

Germany has become woefully well-known for its lack of digital services available, include many which would make the lives of foreigners much easier such as an online Anmeldung or renewing a visa digitally with the immigration offices.

This has steadily been improving, especially since Germany passed an Online Access Act (OZG), to significantly increase such services. But for this year the Interior Ministry has earmarked €3.3 million for the digitalisation of administration and administrative services next year – compared to €377 million this year.

It’s true that many German politicians – including Chancellor Olaf Scholz (SPD) – are pressing for digitalisation in part to persuade more foreigners to come to, and feel comfortable in, Germany. But with the lack of funding, a digital revolution may take a bit longer than hoped. 

READ ALSO: Is Germany a failed state for digital public services?

Higher health care contributions

The one billion budget for long-term health insurance (Pflegeversicherung) is being axed, but the gap is being made up for by higher health care contribution rates which were adapted in July of this year. However some people, such as those with children, have seen their contribution rates decrease slightly. 

READ ALSO: German health insurance contributions ‘to increase in 2024’

More social benefits

The budget may seem to spell doom and gloom for many, but it’s also giving some social services a major boost. Germany’s new unemployment benefit, Bürgergeld, will go up by €23.8 billion in 2023 to €24.3 billion next year.

An additional €127 billion is being allocated to pension insurance (Rentenversicherung), which Germany sees as sorely needed as its population ages and the cost of living – with an inflation rate that sits over six percent – rises.

Foreigners who are accessing some social benefits or their pension could benefit from these changes. 

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For members

GERMAN CITIZENSHIP

How much do you need to earn to qualify for citizenship in Germany?

Applicants for German citizenship need to be able to support themselves financially, but it's often unclear what that means in practice. Here's how to work out if your income is high enough for citizenship.

Published: 15 May 2024 15:29 CEST
How much do you need to earn to qualify for citizenship in Germany?

Out of the requirements for qualifying for a German passport, supporting yourself financially is one of the most important – and one of the most confusing.

Many foreigners assume that the authorities have a magic number in mind and will often worry about whether their income is above or below this threshold.

In reality, though, the law is much more flexible. In section 10 of the nationality law, it states that applicants must show that they “can support themselves and their dependent family members without claiming benefits under the Second or Twelfth Book of the Social Code.”

In other words, that your income is healthy enough to not rely on the state for things like long-term unemployment benefits.

According to Fabian Graske, an immigration lawyer at Migrando, around €1,500 gross per month for a single person is usually considered enough to live on. 

That said, there isn’t really a one-size-fits-all approach to this quesiton. 

When it comes to working out if your income is high enough, you’ll need to take into account a number of factors that your case worker at the naturalisation office will also weigh up. 

That’s why it’s important to ask yourself a number of questions that go beyond just how much you earn: 

How high are your living costs? 

In Germany, there are huge regional differences in the cost of living, so what someone can afford to live on varies hugely from place to place.

For example, someone living in pricey Munich is likely to need much more money for rent or their mortgage than a resident of much more affordable places like Halle or Leipzig, so you should consider whether what you earn is enough to offer a basic standard of living in the city or town you live in. 

READ ALSO: Requirements, costs and permits – 6 essential articles for German citizenship

It is worth mentioning, though, that what you actually pay for rent and bills matters more than the averages. If you’re lucky enough to find an apartment with unusually low rent in Berlin, for instance, you can probably get away with earning less money as well. 

Are you single or do you have a family?

If you’re single and have no children, you’ll likely get a lot more lenience from the authorities when it comes to having a lower-than-average income.

A family sit at a lake.

A family sit at a lake in Bavaria. Image by Eva Mospanova from Pixabay

Of course, if you have dependents such as kids or a spouse who doesn’t work (or both), you’ll need to ensure not only that your own living costs are taken care of, but also that your family can survive on your income alone.

That naturally means you’ll be expected to earn a certain amount more for each dependent child or adult.

On the plus side, any income your spouse does earn will be counted alongside your own, so if you’re the one who is supported by their partner, the authorities will also take this into account. 

Is your job stable or unstable?

One key thing to think about when applying for citizenship is the security of your work contract. Someone who has a long-term contract with an employer and has passed their probationary period will be in a much better position than someone who is still on a three-month trial, for example.

This doesn’t mean you shouldn’t submit a citizenship application after just starting a new job, but be aware that the authorities may well wait to process your application until you’ve passed the initial probation and have been put onto a longer-term contract. 

A similar rule of thumb applies to people who are currently claiming Arbeitslosengeld I (ALG I), or unemployment insurance. Though this doesn’t disqualify you from citizenship, it may delay your application until you can find a stable job. 

READ ALSO: Can I still get German citizenship after claiming benefits?

Do you need to rely on welfare payments to get by?

A key aspect of German naturalisation law is working out whether you’re likely to be a financial burden on the state by relying too much on the welfare system.

The entrance to the Jobcenter in Düsseldorf,

The entrance to the Jobcenter in Düsseldorf, North Rhine-Westphalia. Photo: picture alliance/dpa | Oliver Berg

While everyone needs a helping hand from time to time, claiming benefits like long-term unemployment benefit (Bürgergeld) or housing benefit (Wohngeld) to top up your income sadly shuts you out of the naturalisation process and could also make it hard for you to qualify in the future. 

Luckily, this doesn’t apply to all types of state support – Kindergeld, ALG I and Bafög don’t count, for example – so seek advice from a lawyer or your local citizenship office if you’re unsure.

How old are you?

Though this is hard to fully quantify, age can sometimes play a role in assessments of your financial fitness in Germany.

A young person fresh out of university or vocational college may be seen as someone with high earning potential over the years, so in some cases the authorities may take a more relaxed approach to their current income.

In contrast, an older person coming to the end of their working life could be held to slightly stricter standards. 

This is also why it can be important to show that you have sufficient pension contributions or another form of security for the future, such as owning your own home or having lots of savings. 

READ ALSO: How can over 60s get German citizenship under the new nationality law?

What counts as ‘income’ under German law?

It’s important to note that income doesn’t just have to mean the salary you get at your job: income from rental properties, side hustles and freelance gigs can also be included, as well as things like alimony payments after divorce.

Once again, if you’re unsure, just ask. The citizenship offices are there to advise you and should give you clear instructions about what kind of documents count as proof of income in your application. 

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