What is the payment card? Federal states as financial guardians

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A refugee accommodation in Dresden: The introduction of the payment card is getting closer

Photo: Sylvio Dittrich / IMAGO

Cash is king? The discussion about the introduction of the so-called payment card continues heatedly - even within several state governments. Berlin's Social Senator Cansel Kiziltepe (SPD), for example, does not want any restrictions on cash withdrawals. The Greens in Hamburg warn against discrimination.

On Wednesday, Hesse's Prime Minister Boris Rhein (CDU), as chairman of the Prime Minister's Conference, announced that a payment card for the disbursement of state funds would be introduced nationwide. 14 federal states have agreed on a joint procurement procedure, Bavaria and Mecklenburg-Western Pomerania want to go their own way.

Bavaria, for example, announced that it would introduce the payment card nationwide by the summer. Cash withdrawals should be limited to the legally required minimum.

What is it about?

Basically it's about how asylum seekers should receive benefits. In November, the federal and state governments agreed to introduce a so-called payment card. This is a balance-based debit card without an account connection. Asylum seekers should “in the future” receive part of the benefits as credit instead of as cash payment, according to the payment card standards formulated by the federal states. The design is up to the states; only the technical options should be uniform.

In plain language this means: As with a prepaid tariff on a cell phone, an amount that is available is charged. Once the amount has been used up, the card can no longer be used until the next top-up.

One of the goals of the payment card is to reduce the administrative burden on municipalities. Federal states that have increasingly issued benefits in kind have complained about “huge logistical challenges” in recent years. Individual municipalities are already testing the payment card; In Erding, Bavaria, it existed from 2016 to 2020, i.e. until the bankruptcy of the technical provider, a certain Wirecard AG.

What is it really about?

Refugees and their state benefits have been one of the dominant political issues for months, and last September CDU leader Friedrich Merz sharpened the tone in the debate. Rejected asylum seekers had their teeth done in Germany and thus took away Germans' appointments at the dentist, said the opposition leader. This even caused criticism within the Union.

Now the countries are making no secret of the fact that the payment card is also about reducing the number of refugees. The State Chancellery in Wiesbaden quoted him as saying that this is “fighting inhumane smuggling crime.” However, the argument that so-called pull factors would be abolished with the payment card, which also comes from the ranks of the FDP, is controversial.

This comes at the expense of those seeking protection. People who seek asylum in Germany have to give up part of their self-determination because of the payment card. The card, which cannot be used to withdraw or transfer money, is intended to prevent asylum seekers from sending money home. In principle, the payment card should be able to be used in all sectors in Germany, but its use may be restricted regionally by countries. Rhein cited the gambling industry as an example. The countries act as financial guardians, so to speak.

What is the current regulation?

The previous cash payments in the first few months after arrival are often just pocket money, i.e. a contribution of 100 to 150 euros. According to current case law, this part must be paid out in cash to the benefit recipient; the payment card does not change this. Asylum seekers often initially receive the rest of their benefits, single people receive asylum benefits amounting to 460 euros, as benefits in kind anyway.

When asylum seekers move out of the initial facilities, they mainly receive cash benefits instead of benefits in kind. Here too, however, there are different arrangements in each country; sometimes the money is given in cash at the social welfare offices, sometimes it is transferred.

Sometimes more benefits in kind are given out, sometimes more cash is paid out. Only refugees who are recognized receive the full citizen's allowance.

This also leads to criticism of the payment card and the argument that people should not send money to their home country. It is cynical to criticize when people already have less than the citizen's allowance and save an additional 20 or 30 for their relatives, said volunteer asylum counselor Maria Brand to SPIEGEL, who already knows the payment card from Erding, Bavaria.

What are the reactions?

Federal Finance Minister Christian Lindner (FDP) described the introduction of the payment card as a “milestone”. The left-wing federal chairwoman Janine Wissler, however, doubts the effect; Research shows that welfare benefits don't have pull effects, she explained. "Cheap populism and pseudo solutions won't get us any further in refugee policy."

The organization Pro Asyl described the payment card as a “discrimination instrument” and said its main purpose was to make life difficult for people here and to deter them. The organization called on countries to make use of the scope that still exists.