Trade associations are calling for reforms to safeguard the welfare state.

"Anyone who wants to safeguard the welfare state must reform it," says Jörg Dittrich, President of the German Confederation of Skilled Crafts. "We demand bold reforms so that the welfare state remains based on solidarity, affordable, fair to all generations, and future-proof."

Without changes, the welfare state in its current form cannot be maintained, says Jörg Dittrich, President of the Central Association of German CraftsTherefore, politicians must initiate reforms. "Anyone who wants to safeguard the welfare state must reform it. Anything else is just a smokescreen. In light of demographic change, rising costs, and increasing burdens on businesses and employees, it's clear: continuing as before will not lead to more solidarity, but rather to the systems being overwhelmed," said Dittrich.

A welfare state based on solidarity and capable of taking action is the foundation of social cohesion. Solidarity means taking responsibility for one another. This applies to employees as well as employers. Dittrich: "The skilled trades, in particular, know how important this cooperation is. Both sides are represented in our organization, and we see every day that sustainable solutions emerge where responsibility is shared within companies. Solidarity is not a one-way street. It must apply to those who need benefits, as well as to those who finance them, and to the younger generation, who rightly expect the systems to continue to function in the future."

Distribute loads evenly

The functioning of social security systems is at risk because pension, health, and long-term care insurance are becoming increasingly difficult to finance. Total social security contributions are falling further and further away from the 40 percent mark. This puts a strain on employees and businesses and undermines trust in the effectiveness of the social security systems, especially among young people. "We demand bold reforms so that the welfare state remains based on solidarity, affordable, fair to all generations, and sustainable for the future," says Dittrich.

The burdens must be distributed fairly, perverse incentives must be eliminated, and gaps in fairness must be closed. "This also includes uncomfortable debates about working life, contribution structures, and new forms of social security for the self-employed and entrepreneurs. A strong welfare state is not built by clinging to the status quo or by making unilateral demands, but by honesty, dialogue, and the courage to change. We, as a skilled trades sector, accept this responsibility and expect it from all other stakeholders as well."

Commission presents proposals

The one from the Federal government The Commission for Social Welfare Reform (KSR), appointed to oversee the reform of the welfare state, has now presented proposals for modernizing the system. It sees great potential in digitalization for relieving the burden on social welfare administrations and accelerating procedures. "The KSR is convinced that the welfare state must increase its efficiency, further relieve the burden on administrations, and provide more targeted support to citizens through transparent, digital, and citizen-friendly processes," the commission's report states. One of the commission's goals is to achieve cost savings through more efficient benefit delivery.

In its deliberations, the Commission focused on four areas of action: reorganizing social benefits, improving employment incentives, simplifying legislation, and digitizing and modernizing public administration. The Commission presents 26 recommendations for these areas. "This report outlines a comprehensive reform concept for tax-funded social benefits with the threefold objective of achieving tangible relief for citizens, significantly simplifying administrative procedures, and initiating a digital reboot of the welfare state."

The Commission recommends the following:

The welfare state should become simpler and more understandable through:

• Combining of services,
• Applying for social benefits via a single, digital portal,
• Local advisory services.

The welfare state should become less bureaucratic and more efficient through:

• fewer interfaces and shorter processing times,
• Automatic payment of child benefit without application,
• More uniform legal terms and stronger generalizations.

The welfare state should become more digital through:

• facilitated data exchange between social services authorities,
• uniform IT standards,
• Digitally compatible social data protection, with a high level of protection,
• More automated processes, also using AI.

KSR recommendationsHere you will find the Report of the Commission on Welfare State Reform.

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