Employment agency in crisis: Rising unemployment threatens the budget!

Employment agency in crisis: Rising unemployment threatens the budget!

The Federal Employment Agency (BA) is faced with a significant budget deficit due to rising unemployment. According to a current report from the BA, the number of unemployment benefit recipients was 895,000 people on average in 2024, an increase of 96,000 compared to the previous year. As a result, BA's expenses increased by 3.39 billion euros to a total of 22.16 billion euros. The forecast for 2025 suggests that the number of benefit recipients could even exceed one million, which would cause additional expenditure of 4 billion euros.

The AfD parliamentary group expresses concern about the development and points out the need for reform-related adjustments to employment services and activating basic security. Gerrit Huy, the parliamentary group's labor market spokesman, emphasizes the importance of a sensible economic policy to ensure placement in the regular labor market as quickly as possible and to create new jobs.

Economic policy challenges

The BA's financial challenges are compounded by the high administrative costs of unemployment insurance. In addition, the budget is not sufficient to keep the contribution rate stable at currently 2.6 percent. It is also critically noted that the previous traffic light government tapped the BA's reserves, which have not yet been rebuilt. The expected losses for the years 2026 to 2029 due to subdued growth prospects add to the uncertainty.

The definition of unemployment plays a central role in this context. According to the Social Security Code (SGB), anyone who has no paid work is considered unemployed, but not all people without gainful employment are to be considered unemployed. Pupils, students and other groups of people who are not generally available for the labor market are not counted as unemployed. The International Labor Organization and EU regulations define specific criteria: Unemployed people must be without work, be available to the labor market and actively seek employment, as the BA explains.

Definition and support of the unemployed

The labor law provisions according to SGB III define more precisely who is considered unemployed and who is not. Persons who are temporarily unemployed, have registered as unemployed and are available to the agency's placement efforts are recognized as unemployed. However, participants in active labor market policy measures are not included. In addition, there are specific regulations for recipients of unemployment benefit II, especially over the age of 58, which can influence their unemployment.

In view of these challenges, the AfD parliamentary group is calling for a fundamental reform of the employment service in order to create timely solutions and generate jobs that do justice to the current situation. Improved economic policy is seen as the key to stabilizing the labor market and supporting the BA.

Links to the reports can be found here: AfD Bundestag and Employment agency statistics.