Germany announces a big offer for Asylum Seekers regarding social benefits. According to this, they should in future receive part of the state support via payment card – and no longer in cash. Such a nationwide map was agreed upon at a meeting between the Prime Minister and Chancellor Olaf Scholz (SPD) in November 2023. The important thing is that the card cannot be used for payment abroad. According to the government statements, this procedure will cut down the necessary cost of cash transferred to the provinces and then to the municipalities. This will indeed decrease the administrative costs.
The legal entitlement to “pocket money” to cover “necessary personal needs” depends on the living situation and age of the asylum seeker. In the initial reception, by the Asylum Seekers Benefits Act, they are given pocket money of 182 euros for personal needs such as cell phone credit or bus tickets as well as a bed and meals. If they live in secondary accommodation where they have to look after themselves, single people receive 410 euros, i.e. around 40 euros less than those who receive citizen’s benefits. According to the Federal Statistical Office, around 482,300 people received standard benefits under the Asylum Seekers Benefits Act at the end of 2022.
The payment card is scheduled to be introduced nationwide in 2024. Hamburg has been the first federal state to issue the payment card since mid-February. It is issued at the Office for Migration. Hamburg is the first federal state to issue such a card. Since February 15th, newly arrived refugees who are entitled to benefits under the Asylum Seekers Benefits Act have been receiving prepaid cards in the initial reception centers. Each adult receives a monthly credit of 185 euros, which can be used to buy and pay for everyday items. Authorities said child benefits would also be credited to a parent’s card. According to the information, cash withdrawals are also possible at ATMs – but only up to a maximum of 50 euros per month – plus 10 euros for each child.
Instead of cash paid out by the municipalities, refugees who are in the asylum application process or only have a toleration status should make their purchases using a card. The money should be transferred regularly by the social authorities to banks, which top up the cards with the credit.
The provinces have agreed that it should be a credit-based card with a debit function – i.e. without an account connection – that replaces paying out cash. Each federal state decides for itself the amount of the cash amount and other additional functions. The technical options for the payment card should be uniform in all states. In principle, the card should be valid nationwide, but states can restrict it regionally and for certain industries.
The state is only taking a special approach in the upcoming procurement process to be able to introduce the payment card more quickly than other federal states. The Interior Ministry in Schwerin announced that the payment card will not differ in terms of content. The state of Bavaria also wants to go its own way.