Ifo Study Reveals Complex German Social Benefits Landscape
A comprehensive study by the Munich-based Ifo Institute has shed light on the complex and fragmented landscape of social security benefits in Germany. The study, assisted by AI, uncovered over 500 individual social security benefits that citizens must apply for separately, highlighting the need for simplification.
The Ifo team, aiming to provide a systematic overview, found that these social security benefits are implemented differently across the 16 states and 400 local authorities, creating perverse incentives. The study identified over 500 federally funded social security benefits, but due to the overwhelming complexity, it resulted in an inventory list rather than a complete quantification.
Ifo economists aimed to determine eligibility, usage, cost, and administrative burden for each social security benefit. However, they found that necessary data does not exist, making it challenging to assess the full picture. The team compiled a comprehensive inventory, inviting experts and stakeholders to submit additions or corrections.
Experts suggest streamlining social security benefits along British lines or using an AI-powered app for easier navigation. Regional schemes add more complexity, with Bavaria offering a Bavarian Family Allowance and Thuringia abolishing its state child-rearing allowance. The 'Initiative for a Capable State' identified around 170 social security benefits administered by five federal ministries and nearly 30 agencies. Additional laws, such as the Federal Training Assistance Act (BAföG) and the Federal Parental Allowance and Parental Leave Act (BEEG), create further entitlements. The Social Security Codes contain 3,246 provisions covering social security benefits and their implementation rules.
The Ifo Institute's study has revealed the intricate and disjointed nature of social security benefits in Germany. With over 500 individual social security benefits and varying implementations across states and local authorities, the system is complex and confusing for citizens. Streamlining social security benefits and improving navigation could significantly enhance the social welfare system's effectiveness.
