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Podcast The new basic child benefit Less bureaucracy with more bureaucrats?

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Podcast The new basic child benefit Less bureaucracy with more bureaucrats?

The traffic light government is in the process of completing its basic security reforms announced in the coalition agreement. First, citizens’ money was reformed. The motto was to demand less and encourage more. Housing benefit was next. The motto was more money for more people. The reform of basic child welfare is the final element. The aim is less child poverty, everything from a single source and less bureaucracy. The state has an obligation to pay.

The planned reform of basic child welfare is not a good thing. Lisa Paus, the Minister for Family Affairs, immediately demanded 12 billion euros, temporarily blocked the Growth Opportunities Act in the cabinet in order to enforce her demand, finally received 2.4 billion euros and now wants 5,000 new jobs for the new basic child benefit. The job centers are to be removed from play and replaced by a new authority (family service).

In fact, a lot is going wrong with basic child welfare. Help for children does not come from a single source. It is organized on a multi-pronged basis. Children are supported from the 1st basic security of citizen’s benefit (standard needs, accommodation costs). Around 2 million children benefit from this. However, benefits are also granted from the 2nd basic security for working parents with (low but not too high) income (child benefit, child allowance, housing benefit).

Things aren’t going really well. Child poverty is high and the level of education is poor. There is a confusion of services from different institutions. A single parent, for example, has to contact 8 different bureaucracies to apply for 12 different benefits. The income limits are not coordinated, the benefits vary regionally, the crediting methods differ, and the parents’ work incentives are unequal and non-transparent.

The federal government wants to get more children out of poverty. Less bureaucracy through more digitalization should help make it easier to use legitimate claims. The benefits for children from citizen benefit households and from households that have (too little) income themselves are to be bundled in a new authority (family service). The problem of the interface between citizens’ benefit and housing benefit is not addressed. The old problems with work incentives also remain unresolved.

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The planned reform of basic child benefits cures symptoms, costs a lot of money and creates new bureaucracies. What is necessary is a uniform system of basic security. It could be achieved without much effort. 1st element: A new citizen’s allowance covers the daily needs of parents. 2nd element: Basic child security includes the standard needs for children, the child allowance and child benefit. 3rd element: A new housing benefit includes the costs of accommodation from the citizen’s benefit and the housing benefit from the 2nd basic security.

A conversation between Prof. Dr. Ronnie Schöb (FU Berlin) and Prof. Dr. Norbert Berthold (JMU, Würzburg)

The participants:

Prof. Dr. Ronnie Schöb is professor of economics at the Free University of Berlin. His focus areas are: labor market policy, tax theory, reform of the welfare state, environmental economics and resource economics. He has been a research professor at the ifo Institute Dresden since 2008. Previous positions at the University of Munich, University of Essex (UK), University of Western Ontario (Canada), Otto von Guericke University Magdeburg and as managing director of the Association for Social Politics.

Prof. Dr. Norbert Berthold is Professor (emeritus) of economics, particularly economic order and social policy, at the Julius Maximilian University of Würzburg. He worked at the universities of Freiburg, Basel, Münster, Hamburg, Konstanz, Düsseldorf and Würzburg. Norbert Berthold is the initiator and operator of the economist blog “Economic Freedom” and therefore also the namesake and initiator of this podcast.

Blog post on the topic:

Tom Günther, Svenja Miltner and Ronnie Schöb: The new basic child benefit repeats old mistakes

by Tom Günther, Svenja Miltner and Ronnie Schöb

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