The German Association of Cities and Municipalities (Deutscher Städtetag) is signaling openness to discussions about transferring municipal responsibilities in the social sector, potentially to the Federal Employment Agency (Bundesagentur für Arbeit), as part of broader social welfare reforms. This consideration follows a proposal put forward by the Federal Employment Agency, which has also been presented to the government’s Social State Commission.
According to Christian Schuchardt, Managing Director of the Städtetag, municipalities are willing to relinquish tasks where their decision-making power is limited, especially when cost coverage is lacking. He specifically mentioned housing benefit (Wohngeld) as a potential candidate for transfer.
The Federal Employment Agency, under the leadership of Andrea Nahles, has suggested consolidating housing benefit with the existing child benefit supplement (Kinderzuschlag). Currently, both systems provide income support for working low-income families, but are administered by separate entities, requiring families to navigate different application processes.
However, the Städtetag’s willingness to explore this realignment is contingent on certain conditions. Schuchardt stressed the importance of ensuring a complete transfer of responsibilities, preventing what he described as a “cherry-picking” approach. If the Federal Employment Agency assumes responsibility for housing benefit, it should encompass all recipients, not just those who are employed.
Housing benefit, jointly funded by the federal government and the states, currently supports approximately 1.2 million households. Local housing benefit offices are presently responsible for its administration. The child benefit supplement, meanwhile, is provided by the Federal Employment Agency’s family cash offices and was disbursed to 1.4 million children as of August. The potential shift is part of a broader conversation surrounding the efficiency and structure of Germany’s social welfare system.