For months, the traffic light parties have been arguing over the 2025 federal budget, citing tight budgets and a weak economy. FDP: continues to insist on maintaining the debt brake. The state should be satisfied with the money earned by people in Germany, emphasizes the head of the FDP parliamentary group, Christian Durr. on ZDF. SPD: and the Greens want mitigation. It is not the only controversial topic.
Because billions in holes need to be filled, and at the same time several departments are reluctant to meet Finance Minister Christian Lindner’s savings targets. But what does that mean for your money?
Citizen benefits reform may be coming
It is an important controversial topic. Social Affairs Minister Hubertus Hale has already announced that there will be no sharp increase for citizens’ benefit recipients from the beginning of 2025. The FDP is not going far enough. “The debt brake is working, and we have to be satisfied with the money we have. And that means, among other things, that more people who could be working are actually working instead of receiving citizen’s benefits. And we have to work on the laws again and tighten them,” Lindner told the Welt TV news channel.
The FDP has specific plans already on the shelf If the recipients of citizen’s benefits stubbornly refuse to work, then the benefit ban should be applied for three years. If appointments are missed without good reason, the standard claim must be immediately reduced by 30 percent. This is intended to increase the pressure on those who refuse to work.
They have had it since 2005 Job center Uncooperative Hartz IV recipients (today Citizen’s Money) were disciplined on a “prompt and demand” basis by disconnecting their money. The Federal Constitutional Court had already severely limited this sanctioning practice in November 2019, after years of criticism. Most recently, there was a moratorium on sanctions. But many of these citizens’ money-deniers don’t even exist Data from the Federal Employment Agency show .
Singles are currently entitled to €563. Adults living with a partner get €506. For young people between 15 and 18, it is 471 euros. Children from 7 to 14 years old receive 390 euros.
The highest pension payments in 2025
In case of Pension Package II, the extended holding line has now been dropped. Previously, it stipulated that the amount of payments could not exceed 20 percent. The government thus paves the way for increased investments. So far, employees and employers have had to pay a total of 18.6 percent into the pension fund.
To fund pensions, the government initially wants to use pension insurance reserves and higher contributions. The investment rate should remain stable at 18.6 percent until 2027. There is no guarantee for that.
It has already been decided to raise it to 20 percent from 2028. A further increase to 22.3 percent is planned from 2035.
Tax class III and V combinations will be eliminated
Starting in a few months There are programs circulated by the Federal Ministry of Finance, which could now be put into practice. The different tax classes (III and V) for married couples will be abolished. Instead, there should be only one tax bracket for both spouses.
So far, high income earners are taxed under Class III tax, low income earners are taxed under Class V tax. While high earners pay less in taxes and therefore have more in their accounts, the opposite is true for low earners. After filing the tax return, money is usually refunded by the tax authorities, depending on the amount of taxable income.
By eliminating tax brackets III and V, low-income earners pay less tax and higher-income earners pay more. The main thing is that there should be no additional burden for the couple. However, calculations show. In some cases Then there will be additional burden. And the state benefits from this.
A ticket to Germany may be more expensive
It is unclear whether the ticket to Germany will remain or will become significantly more expensive. Because the federal Department of Transportation has to save, but is also responsible for financing. Under the regional law, the federal government will pay €1.5 billion a year until 2025, as will the states. The latter spoke in favor of the continuation of payments at the transport conference in April. The federal government has yet to consider it.
In recent months, there have been intense discussions about the distribution of costs. In the spring, Deutschland Ticket’s funding gap was €350 million. “The selling price of the ticket in Germany is regularly checked,” said the main decision of the summit of the transport ministers of the federal states. By 2025, the federal government should an investment of almost 1.5 billion euros , if the price should remain at 49 euros. The remaining 1.5 billion is from municipal governments. Households may have to prepare for an increase of 69 euros.
The end of the basic protection of the child.
This is a project close to the hearts of the Greens – the basic well-being of children from 2025 onwards. However, given the tight budget situation, it may be delayed indefinitely. Originally, basic child benefit was intended to replace the previous child benefit. Instead, different benefits should be combined into one basic benefit, including child benefit, child benefit, child citizenship benefit and parts of the education and participation package.
Wish with it the green Fight against child poverty. In the first year of payment, the ministry expects the family to spend 2.4 billion euros. However, the Federal Ministry of Finance is sounding the alarm, as the amount could reach up to six billion euros in the following years. On top of that! The federal states are also facing large financial costs. The administration faces a high level of bureaucratic effort, which can ultimately blow up budget planning.
Higher spending on film, theater and culture
During the negotiations, the Federal Ministry of Finance proposed to eliminate the reduced rate of tax on cultural goods. This will have huge implications for the cultural industry, artists and also consumers. Like the food sector, where the reduced tax on food was abolished at the beginning of the year, this will affect the prices of cinemas, theaters, concerts and museums. In the stadium, 19% will no longer be charged on tickets, but 7%.