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Prefabricated buildings in the Neu-Hohenschönhausen district of Berlin

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Sebastian Gollnow/dpa

A few days ago, the Munich Ifo Institute published an exciting little study that aims to show that working in Germany is always worthwhile. Even in the border areas, where it sometimes seems as if households might only be better off if they only receive citizen's money.

In fact, the study impressively shows that someone who works is practically always better off than the citizen or family with only citizen's money. Citizens' benefit recipients who work and receive supplementary citizen's benefit, so-called top-ups, are also better off than citizens without their own income.

However, always under the condition that the state aid to which the working household is entitled is actually used, be it citizen's benefit, housing benefit or child allowance.

Perceived injustice, real gaps

Which brings us to the crux of the matter. Even perceived injustice can be real injustice. Worse still, there is often a kernel of truth behind the perceived injustice.

  • Anyone who doesn't apply because he or she doesn't know whether and how much help is available will quickly feel disadvantaged. Here you can quickly find out whether you are entitled to housing benefit, for example.

  • If an authority takes too long and doesn't help with processing, you quickly feel disadvantaged. In North Rhine-Westphalia you can now calculate housing benefit online and then apply there.

  • Anyone who experiences their right to help as alms, is too proud for it, or experiences exercising their right to the relevant authorities as a supplicant, quickly feels disadvantaged. This is particularly true when it comes to citizens’ money.

This can easily be substantiated empirically. The German Economic Institute in Cologne has stated several times on the question of housing benefit that up to two thirds of those entitled to housing benefit have not submitted a corresponding application in the past. If in doubt, this means an average amount of 300 to 400 euros per month for a family. Housing benefit is a statutory benefit that is available to households that earn too much money to still be entitled to citizen's benefit. But not enough that they could afford to live in their community without government assistance. When it comes to child allowances, the numbers are even more drastic. The federal government assumes that parents currently only receive child allowance for just over one in three eligible children.

At least more applications

The problems are known. In the past five years, two federal governments have worked on the housing benefit problem. Above all, they have given more households the right to more money. At the same time, they have ensured that housing benefit increases at regular intervals. So that households don't receive housing benefit one year and then end up with citizens' benefit again the next year - an inefficient revolving door effect.

In fact, more households have subsequently submitted corresponding applications. The German Association of Cities said this week that the number of applications for housing benefit has doubled in 2023 and even tripled in some municipalities. Two million households was the goal that Federal Construction Minister Klara Geywitz set for 2022. At the beginning of January, the Ministry of Construction announced that the two million households had been reached and 4.5 million people were now benefiting from housing benefit.

This is still not the right remedy

This week I asked in ten major German cities how long it takes for a housing benefit application to be processed. It doesn't happen anywhere really quickly.

  • In Hanover, processing citizens' entitlement to housing benefit takes 65 working days, 13 weeks or a long three months.

  • Bochum is trying to help existing customers more quickly with their housing benefit notice. We already know that they are entitled to help and that they urgently need the money. Background: The housing benefit application must be submitted every year. To do this, “new customers” have to wait five months for their housing benefit, which they are entitled to for their living expenses and are actually missing.

  • In Leipzig, it took an average of around 128 days, or a good four months, for a housing benefit application to be approved in 2023. In the future it could take even longer. Last year, 41,852 housing benefit applications were received in Leipzig, only 38,336 of which could be processed.

  • The same picture in Halle. 17,012 new applications, 15,449 that could be processed until the decision: “four to six months.”

  • Dresden had to process 36,582 new applications last year. At times it took up to 128 days, but by the end of the year the “average processing time had been reduced to 84 days,” according to the city administration.

  • In Kiel alone, a total of 1,968 housing benefit applications were received in the last quarter of 2023, and only 1,536 could be processed. It currently takes six weeks “until the first cover letter”, not until the approval. In a statement on the 2022 housing benefit reform, the City Council wrote that the forms were so complicated that up to 90 percent of the applications were initially incorrect.

  • Difficult figures also come from the other end of the republic in Nuremberg: an “average processing time of six to nine months can be assumed.”

  • Only Kassel reports halfway decent numbers. “Six to eight weeks” from receipt of the application to the first decision. Almost in the Hessian target corridor: But even in Hesse the number of approved applications is lower than the number of new applications.

  • Magdeburg reports that they managed ten percent of the applications in the first month, but 37.4 percent had to wait more than five months.

  • In Erfurt they couldn't give me numbers so quickly. The procedural support for housing benefit is located directly at the ministry. Valid numbers last until next week.

The time disaster is certainly also due to the lack of staff. The municipalities warned about this last year. The Bundestag's budget committee was perhaps even a little happy that the municipalities were not making any progress with staffing for housing benefit - that ultimately saves expenses - and cut the housing benefit budget item for 2024 by 270 million euros. But receiving social benefits should not depend on the number of employees. Especially for people who urgently need the money. You have the right.

Politicians are actually completely aware of this, I am told by the city council. That's why the traffic light introduced the minimum wage of currently 12.41 euros and increased the housing benefit considerably.

And that's why the planned basic child protection must come. But if ten different services from seven different authorities have to be coordinated, bureaucratic failure is almost inevitable. In fact, a lot more money should be spent on this if families would finally collect what they are entitled to. When presenting the government plan, Federal Minister for Family Affairs Lisa Paus assumed that 47 to 48 percent of those eligible would also take advantage of basic child benefits in 2025. That's more than the current child allowance - but still not even half of those entitled.

Roadmap to money

If there is a right to support and the money actually has to flow, then as a service journalist I cannot come to terms with the current situation. Citizens not only need to know that work in this country is worth it according to the law. They also need to know how to get the help they are entitled to so that they have more money in their pockets practically, and not just according to law and order. Money things like this have to be easy to do. This certainly also includes understandable forms. Here is my little timetable:

  • Apply for housing benefit. Do you think you earn too much? A family of four in Berlin can earn 4,700 euros gross and still receive housing benefit, in Munich even almost 5,000 euros. An average of 370 euros per month should flow.

  • You should also apply for housing benefit if you live in your own property and earn little money. This means a burden subsidy for the authorities, which you are also entitled to. The checklist provides information on how to apply here.

  • If you have children, little money, but too much to receive citizen's benefit, you are entitled to the so-called child allowance. Up to 292 euros per child per month. Submit the application.

  • If you are a senior with a low pension, you may be entitled to basic security in old age. A right that is often not used. Make use of this right instead of slipping into a spiral of debt. Just a few weeks ago, Creditreform announced again that the number of over-indebted senior households increased by 259 percent between 2013 and 2023.

  • And of course, if it's necessary, apply for citizen's benefit - you can do that too with the overview from my "Finanztip" colleagues. The Federal Employment Agency alone looks after almost three million so-called communities of need. It supposedly only takes 14 days for the money to flow once all the documents are there. Importantly, this week the agency could not quickly confirm the number. But if it doesn't happen that quickly, you can at least apply for an advance payment here.

Good luck – and help the neighbors if they need help.