Less money, more work: why Germany is cutting aid to refugees from Ukraine
13 November 19:32
ANALYSIS FROM 
All Ukrainian citizens who arrive in Germany for the first time after April 1, 2025, will no longer receive Bürgergeld, the standard basic unemployment benefit. Instead, they will receive support at the level of ordinary asylum seekers. In fact, this means a reduction in benefits for newly arrived Ukrainians, "Komersant Ukrainian" reports, citing Bild.
Germany has hosted one of the largest communities of Ukrainian refugees in Europe – more than 1.25 million people as of the end of 2024. Now, important changes to the social support system for this group are coming into effect in the country. At the center of the reform is the reduction of state benefits for newly arrived Ukrainians and the transition to stricter rules, which is expected to affect both budget expenditures and the situation on the labor market.
Below we explain the essence of the changes, their causes and consequences for the economy and refugees themselves.
As mentioned above, Ukrainians who arrived in Germany in April 2025 and later will not receive Bürgergeld. This financial assistance for a single adult currently amounts to 563 euros per month, with the state additionally paying for rent and utilities. But under the law on assistance to asylum seekers, the total payment is fixed at 441 euros per month (about 196 euros for personal needs plus another 245 euros for food, clothing and other basic expenses). Thus, newly arrived refugees will receive about 20% less money per month compared to those who receive Bürgergeld.
Who will keep their old benefits
Ukrainians who arrived in Germany before April 1, 2025, will continue to receive civilian assistance under the current conditions. That is, the special status introduced in 2022 for already integrated refugees will remain unchanged for them. Similarly, the new rules will not affect Ukrainians who came to Germany under other programs. For example, skilled workers or students will continue to receive support under their programs.
What Ukrainians need to know about the transition period in Germany
If a Ukrainian arrived after April 1, 2025, but before the law came into force (i.e. between April 2025 and the date of adoption of the reform), the Bürgergeld payments already assigned to him or her will temporarily continue to be paid. However, the maximum period is until the end of May 2026, after which these persons will also be transferred to lower payments under the rules for asylum seekers. Thus, the government has abandoned the idea of abruptly stopping payments retroactively and introduced a compromise mechanism for a smooth transition to avoid confusion with recalculations.
Germany cuts payments to Ukrainian refugees: why the government introduced these changes
The reform was initiated by Germany’s new ruling coalition of the conservative CDU/CSU bloc and the Social Democratic Party (SPD). The coalition agreement of these parties explicitly provides for a return to pre-war social support standards for Ukrainians. The government’s motivation has two main aspects.
First, it is the budgetary burden on the regions. The maintenance of more than a million refugees at the Bürgergeld level has become a significant financial burden. in 2023, Germany’s total expenditures on basic social security (including Bürgergeld) amounted to about 47 billion euros, of which 6.6 billion euros went to Ukrainians. For federal states and municipalities, which cover a significant portion of the costs (primarily for housing and social services), this was particularly noticeable. It was complaints from local authorities about budget overload that became one of the impetus for the reform. The government promised that after the status of newcomers was changed, most of the additional costs of the asylum program would be borne by the federal budget to compensate the regions.
The second key motive is the lack of integration of Ukrainians into the labor market. The proportion of Ukrainian refugees who have found work in Germany is significantly lower than in other EU countries. According to the Institute for Labor Market Research, at the end of 2024, only about 242,000 Ukrainians were working in Germany, or about one in five of those who arrived after the war began. At the same time, about 700,000 Ukrainian refugees (including about 200,000 children) were receiving Bürgergeld social assistance at the end of 2024 and were unemployed. The government considers this figure too low and directly links it to overly generous payments: they say that “civilian” assistance reduces the incentive to work. Indeed, Ukrainians under temporary protection have found themselves in a privileged position compared to other refugees who receive less. This created a kind of “two-tier” social security system. So the new government decided to eliminate this difference in order to encourage asylum seekers to take up work more actively.
According to the coalition, the main goal of the reform is to “restore justice and incentives to work” for Ukrainians. The government leaders explicitly state that the reduction of benefits should be an impetus for refugees to look for work faster and thus integrate more easily into German society. The government also emphasizes that it is actually restoring the rules that were in effect until June 2022: back then, Ukrainians in Germany also received assistance as asylum seekers until a special decision was made to allow access to social security programs for the unemployed.
Read also: “Solidarity Account: how much money European countries spent on Ukrainian refugees
Germany is changing the rules for supporting Ukrainians: how it will affect the labor market and the country’s economy
The financial effect of the reform will be tangible, but not revolutionary. According to the German Ministry of Labor, the change in the rules of assistance will reduce direct expenditures of the federal budget by about 1.2 billion euros in 2026 and another 350 million euros in 2027. The savings will arise from the fact that newcomers will no longer receive payments from the Bürgergeld program. However, at the same time, expenditures on other items will increase: the federal budget will have to finance assistance under the Asylum Seekers Act (441 euros for each new refugee) and compensate the Länder for the costs of accommodating these people. The government’s preliminary calculations show that the reduction in benefits will be almost balanced by additional spending on housing and other refugee needs, so the net gain for the budget will be modest. For example, in 2026-2027, the expected cuts in spending on the Bürgergeld program (about €1.1 billion) will almost equal the increase in spending on the Asylbewerberleistungen program (about €1.3 billion).
The burden on the budgets of the federal states may even increase if refugees stay in accommodation centers or social housing funded at the local level. In response, Berlin promised financial support to the regions if they agreed to the reform. Thus, the real effect on public finances will be more about redistributing costs between levels of government than about making big savings. Government officials, however, consider such a reconfiguration of expenditures to be justified, as direct pressure on the social insurance system will be reduced and, theoretically, more refugees will start working and paying taxes.
Supporters of the reform expect positive changes in the labor market. The government wants to encourage Ukrainians to find jobs faster by tightening the conditions of assistance. Refugees of working age, who have been relying on benefits until now, will now be required to look for work more actively. The coalition even plans to introduce a rule: everyone who can work but is not yet employed must register at an employment center and make efforts to find a job. This includes attending interviews, participating in retraining programs, language courses, etc. For failure to comply with the requirements, refugee job seekers will be able to be deprived of part of their benefits (sanctions), similar to the rules for the local unemployed. Such steps are expected to increase the supply of labor and help fill vacancies, especially for low-skilled labor, where there is a shortage of personnel in Germany.
At the same time, labor market experts warn that the effect may be mixed. Reducing benefits does not guarantee quick employment, especially if there are barriers such as insufficient language skills or an unrecognized diploma. Representatives of the German Federal Employment Agency expressed skepticism about the reform: if Ukrainians are no longer clients of Jobcenter, it will become more difficult for them to access language courses, adaptation programs, and employment.
In other words, by losing the status of Bürgergeld recipients, refugees also lose part of the integration support infrastructure. This can slow down their entry into the labor market. The researchers warn that the recent positive trends (an increase in the number of employed Ukrainians) may slow down if the new system makes it more difficult to access training and retraining.
The changes introduced were the result of a compromise between different approaches to solving the problem. The conservative forces (CDU/CSU) initially insisted on more radical steps, including proposals to transfer absolutely all Ukrainian refugees to lower benefits, regardless of their date of arrival. There were also ideas to retroactively revise the payments, i.e., to stop the Bürgergeld even for those who arrived in the spring of 2025. However, such intentions were met with resistance from municipalities and Länder: local authorities warned that retroactive cancellation of assistance violates the principle of trust in the state and will create chaos in settlements. After all, thousands of refugees had already counted on receiving a certain amount and planned their budgets accordingly, so abruptly canceling payments could cause social tension. Moreover, the current law actually prohibits such drastic changes in the social sphere retroactively, especially if they worsen the situation of people who have complied with all the requirements of the law. From a practical point of view, an attempt to “roll back” payments retroactively would be fraught with enormous bureaucratic difficulties. Tens of thousands of cases would have to be reviewed and, possibly, refunds of money already paid would have to be requested.
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In the short term, the reform means that Ukrainians arriving in Germany in the future will have to rely on a more modest level of state support and will have to find sources of income on their own more quickly.
In the medium term, the government hopes to see an increase in employment among refugees and a reduction in the burden on social funds. Time will tell whether these hopes will be realized, but it is already clear that the system of social assistance to Ukrainian refugees in Germany is entering a new phase, closer to standard conditions for asylum seekers.
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