Increasing the Citizen’s Income: Is Work Still Worthwhile?

When the Federal Minister of Labor and Social Affairs, Hubertus Heil (SPD), initially announced the exact amount of the new standard rate for the citizen’s income from January 2024 at the end of August and the federal cabinet confirmed this by decree in mid-September, the outrage was great: the increase by 12% in some cases would mean that working in Germany would no longer be worthwhile – at least that was often the verdict. A criticism that is probably as old as the welfare state itself. In fact, the wage gap can be quite small from case to case. has done the math.

Possible citizen’s income benefits

As of January 1, 2024, single and single-parent adults of legal age without a job will receive 563 euros a month in Standard Needs Level I, which is 57 euros, or 12%, more than they currently receive. This sum can be used for daily expenses, such as food, hygiene articles or a visit to the hairdresser, while the Jobcenter also bears the costs for the cold rent and heating costs. Meanwhile, the office sets an appropriate apartment size for this purpose. For a one-person household, this is 50 square meters2 and thus an average rent payment of 545 euros as well as heating costs averaging around 135 euros. Theoretically, this means that an unmarried recipient of the citizen’s allowance would receive about 1,243 euros per month.

Single person / single parentNo childrenOne childTwo children
Standard requirement563 euros953 euros1,343 euros
Adequate apartment size50 qm265 qm280 qm2
Average basic rent545 euros660 euros780 euros
Average heating costs135 euros175 euros215 euros
Total welfare1,243 euros1,788 euros2,338 euros

For couples, it is 506 euros a month per recipient. For a child aged 0 to 5, the community will pay 357 euros from next year, for a child aged 6 to 13 390 euros and for a teenager up to 17 years old 471 euros, with the appropriate apartment size then also increasing with the size of the household and thus the allowances for housing and heating additionally increasing. A couple with two middle-aged children can thus collect almost 3,000 euros in citizen’s allowance.

Two adultsNo childrenOne childTwo children
Standard requirement1,012 euros1,402 euros1,729 euros
Adequate apartment size65 qm280 qm295 qm2
Average basic rent660 euros780 euros940 euros
Average heating costs175 euros215 euros250 euros
Total welfare1,847 euros2,397 euros2,919 euros

Average income vs. citizen’s income

According to the latest salary report from the job portal Stepstone, the gross median salary in Germany across all professions is 43,842 euros a year, which corresponds to around 3,650 euros a month. A 30-year-old from Bavaria thus receives a net payout of about 2,390 euros in tax bracket I. Minus the citizen’s income benefits for a single person, including housing and heating costs, he thus has about 1,147 euros more per month than the citizen’s income recipient. With one or two children, the wage gap drops continuously to as low as 659 euros in our sample calculation, despite child benefits and income tax class II.

Single person / single parentNo childrenOne childTwo children
Gross income3,650 euros3,650 euros3,650 euros
Net income2,390 euros2,497 euros2,497 euros
+ Child support250 euros500 euros
+ Child supplement
+ Housing subsidy
Total income2,390 euros2,747 euros2,997 euros
– Citizen’s Income Benefits1,243 euros1,788 euros2,338 euros
Lohnabstand1,147 euros959 euros 659 euros

With a two-person household and thus the slide into tax class IV per partner, a childless couple comes to a net income of around 4,780 euros. After deduction of the citizen’s benefits, this leaves both of them with 2,993 euros more. With one or even two children and thus additional child benefits, the wage gap decreases continuously.

Two adultsNo childrenOne childTwo children
Gross income7,300 euros7,300 euros7,300 euros
Net income4,780 euros4,780 euros4,780 euros
+ Child support250 euros500 euros
+ Child supplement
+ Housing subsidy
Total income4,780 euros5,030 euros5,280 euros
– Citizen’s Income Benefits1,847 euros2,397 euros2,919 euros
Salary gap2,993 euros2,663 euros2,361 euros

Minimum wage vs. citizen’s income

If you work 40 hours a week for the minimum wage, you will end the month with a gross salary of around 2,150 euros at the end of the month from January 1, 2024. After deducting all taxes and social security contributions, 1,545 euros of this amount ends up in the bank account. After deducting the citizen’s allowance, this results in a wage gap of 302 euros, which makes the work worthwhile, at least on paper. With one child and thus additional entitlement to child benefit and even housing benefit as well as a better income tax bracket, the gap to the citizen’s income drops to only 154 euros. If you have two children, you have only 44 euros more in your pocket at the end of the month than the person who does not work.

Single person / single parentNo childrenOne childTwo children
Gross income2,150 euros2,150 euros2,150 euros
Net income1,545 euros1,632 euros1,632 euros
+ Child support250 euros500 euros
+ Child supplement
+ Housing subsidy60 euros250 euros
Total income1,545 euros1,942 euros2,382 euros
– Citizen’s Income Benefits1,243 euros1,788 euros2,338 euros
Salary gap302 euros154 euros44 euros

With two minimum wage recipients, there is again more left over at the end of the month than with the citizen’s income, but less than with the median earner.Particularly perfidious: Even a couple on minimum wage is entitled to housing benefit and must receive additional support.In the end, the wage gap is still between 1,382 euros and 1,158 euros.

Two adultsNo childrenOne childTwo children
Gross income4,300 euros4,300 euros4,300 euros
Net income3,090 euros3,090 euros3,090 euros
+ Child support250 euros500 euros
+ Child supplement236 euros
+ Housing subsidy30 euros215 euros475 euros
Total income3,120 euros3,555 euros4,301 euros
– Citizen’s Income Benefits1,847 euros2,397 euros2,919 euros
Salary gap1,273 euros1,158 euros1,382 euros

All on paper

On paper, work pays off compared to the citizen’s income.However, it remains a case-by-case decision, depending on earnings, working hours, tax bracket, additional benefits and, above all, the environment. The average cost of rent is not the same everywhere: In eastern Germany, the cost of living is significantly lower than in southwestern Germany, or even in Bavaria, with its particularly expensive city of Munich. Employees who calculate with average rents, as in our example, will probably not be able to beat the citizen’s income. Even with a minimum wage, it is difficult to pay for an apartment in the Bavarian capital in the size considered appropriate by the authorities. This does not include further expenses for insurance or electricity.

Another factor contributing to the individual case decision is that any costs for a job ticket or car would have to be deducted from the remaining wage gap. After all, you can’t get to your job without them. Of course, this may also be favored in the end by the wage tax equalization, but no one has to work 40 hours a week in order to have paid a few euros in wage tax at the end, as in the case of the couple with minimum wage and two children.44 euros difference is ridiculous. In addition, the job center pays for other expenses, such as the broadcasting fee, any additional heating costs or education and participation for the offspring. If the washing machine breaks down, the citizen’s income pays for the repair or even the replacement. An employee must pay all of this out of his or her own pocket. In addition, you should never convert your pay gap into an hourly wage or break it down to individual household members one at a time.

If you earn at least the median wage and have perhaps already built up your assets, you should never ask yourself whether work is worth it compared to the citizen’s income. Work is worth it for him in any case. However, it is always advisable to demand a salary adjustment.


Following a letter from an attentive reader, the child supplement was additionally included in the above tables. In fact, however, this only affects one case in the case studies and thus has no effect on the final result and the conclusion.

However, it is also justified to point out that the citizen’s income is only intended for those who cannot work. Those who do not want to work have to reckon with penalty deductions even in the case of the citizen’s income and are worse off at the bottom line.

Andreas Stegmüller

Andreas is the founder and operator of this blog. During his more than ten-year editorial career, he has written for several major media outlets on a wide variety of topics. The stock market has been his passion since 2016.

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