Germany adopts 10-point plan to cut welfare for fugitives and curb fraud

Measures against fugitive claims and sham employment

The German federal cabinet approved a 10-point action plan on Wednesday to curb organized social benefit fraud and exploitation linked to migration from within the European Union. Jointly drafted by Federal Minister of Labour and Social Affairs Bärbel Bas and Federal Minister of the Interior Alexander Dobrindt, the measures aim to prevent criminal networks from exploiting EU freedom of movement rules. Under the new rules, individuals subject to an enforceable arrest warrant will no longer receive basic income support under the SGB II and SGB XII welfare codes. This restriction applies to legally convicted criminals who evade their prison sentences despite receiving a formal summons to begin custody. Employers who fail to register workers correctly or arrange sham jobs will face direct financial liability for any resulting overpaid state benefits.

Federal Minister of the Interior Alexander Dobrindt addressed the cabinet decision in Berlin.

Anyone wanted on an arrest warrant must not receive social benefits.

Inter-agency data sharing and artificial intelligence

The strategy relies on expanded data exchange among local and federal offices to close existing regulatory gaps. Municipal social, immigration, registration, tax, security, and construction authorities will cross-reference records alongside statutory health and long-term care insurance funds. The system will deploy artificial intelligence analytical tools to flag patterns indicative of illegal employment, undeclared work, and statutory minimum wage violations. Furthermore, energy suppliers will face a mandatory disclosure requirement, obliging them to inform welfare authorities about customer relationships and secondary residences. To coordinate these enforcement efforts, the Federal Employment Agency will establish a central Competence Center for Benefit Fraud supported by five regional branches.

Federal Minister of Labour and Social Affairs Bärbel Bas commented on the initiative.

Abuse of social benefits harms society and weakens trust in the welfare state.

Action against substandard housing networks

The government plan targets exploitative business models centered on derelict properties, often described as junk real estate, particularly across the Ruhr region in North Rhine-Westphalia. Criminal gangs frequently bring EU citizens from Bulgaria and Romania to Germany, place them in overcrowded, dilapidated apartments, and set up marginal minijobs to establish formal eligibility for supplementary state income support, housing allowances, and child benefits. Most of these public disbursements are subsequently retained by gang organizers through inflated rent charges. Under amendments to the Federal Building Code, municipalities will gain expanded access rights to inspect dilapidated properties, issue binding repair orders, and exercise municipal pre-emption rights. In severe instances, local governments will have the legal authority to carry out property expropriations as a measure of last resort.

Federal Chancellor Friedrich Merz posted a statement on the social media platform X regarding the cabinet decision.

Abuse comes at the expense of everyone who works and pays in.

Implementation schedule and cross-border prevention

The federal government aims to enact all ten points of the eight-page policy document before the end of the year, provided federal budget resources and financing competencies are secured. Alongside domestic enforcement, the plan includes targeted information and counseling initiatives located directly in origin countries to warn prospective migrants about illicit employment schemes before they travel. The cabinet package delivers on previous agreements negotiated by the coalition committee and specified in the coalition agreement.