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Economy

Social assistance spending rises 6.1% in 2025

Germany’s Social Welfare Spending Rises 6.1% in 2025 to €21.5 Billion

Source: Federal Statistical Office Germany · August 21, 2026 at 11:00 AM · AI-assisted report

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Social assistance spending rises 6.1% in 2025
Photo: Jun Acullador via flickr (BY-ND)

KUALA LUMPUR, 21 AUGUST 2026 —

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Germany’s Social Welfare Spending Rises 6.1% in 2025 to €21.5 Billion

Market Impact

KUALA LUMPUR – Germany’s social welfare agencies spent €21.5 billion (RM107.5 billion) net on social assistance under the Twelfth Social Code (SGB XII) in 2025, an increase of 6.1% from the previous year, according to the Federal Statistical Office (Destatis).

The rise in expenditure follows a pattern of steady growth, with the largest share—54.9%—allocated to basic income support for the elderly and disabled, which is fully financed by federal reimbursements to the states. This amounted to €11.8 billion in 2025, up 2.9% year-on-year but representing a declining share of total social welfare spending for the third consecutive year (59.0% in 2022).

The increase in spending on basic income support for the elderly and disabled was lower than in recent years, with the last comparable rise occurring in 2016 (+2.5%). For the first time since the introduction of the Basic Needs Assessment Act in 2011, monthly subsistence allowances remained unchanged as of January 1, 2025. In contrast, significant increases in these allowances in 2023 and 2024 had driven up spending in those years.

Spending on nursing care assistance surged by 13.3% to €6 billion, accounting for 27.8% of total social welfare expenditure in 2025, up from 23.6% in 2022. Meanwhile, assistance for livelihoods rose by 4.4% to €1.7 billion, though its share of total spending continued to decline for the third straight year, reaching 8.0% in 2025 (8.5% in 2022). Expenditure on health assistance, support for overcoming social difficulties, and other forms of aid collectively increased by 6.7% to €2 billion.

The figures cover social assistance under SGB XII and exclude unemployment benefits under the Second Social Code (SGB II, or Bürgergeld) and integration assistance under the Ninth Social Code (SGB IX). These programs were transferred from SGB XII to SGB IX in January 2020 and are no longer classified as part of traditional social welfare.

Further breakdowns of social and integration assistance spending, including federal reimbursements under §46a SGB XII for basic income support to the elderly and disabled, are available on Destatis’ dedicated webpage. Detailed datasets and long-term trends for SGB XII expenditures (excluding basic income support for the elderly and disabled since 2017) can be accessed via Table 22111 in the GENESIS-Online database.

Malaysia Market Impact While Germany’s social welfare spending trends do not directly correlate with Malaysia’s economic indicators, rising social assistance costs in Europe may influence global fiscal policies and investor sentiment. Malaysia’s own social protection expenditures, including Bantuan Sara Hidup (BSH) and other welfare programs, remain a key fiscal consideration. Analysts may compare Germany’s aging population-driven welfare demands with Malaysia’s demographic challenges, particularly in rural and elderly care sectors.

Sector and Company Specifics The data reflects broader trends in Germany’s social welfare sector, where federal reimbursements play a critical role in state-level expenditures. Companies involved in elderly care, nursing services, and social assistance infrastructure may see sustained demand, particularly in regions with aging populations. However, the unchanged subsistence allowances in 2025 suggest fiscal restraint despite rising costs in other areas, such as nursing care.

Outlook Germany’s social welfare spending is expected to remain under pressure due to demographic shifts, with the elderly and disabled population continuing to drive demand for basic income support and nursing care. While the 6.1% increase in 2025 is significant, the slower growth in basic income support—after years of sharp rises—may signal a period of stabilization. Future adjustments to subsistence allowances and federal reimbursement policies will be closely monitored, particularly as policymakers balance fiscal sustainability with social needs.

Reporting based on Federal Statistical Office Germany. Figures and claims are subject to revision as the story develops. DomainFork publishes editorial context, not investment advice — see our editorial standards.