The Administrative Board today approved the contribution budget of the Federal Employment Agency (BA) for 2026. Due to several years of economic weakness, the resulting rise in unemployment, and poor job prospects, the budget remains in deficit. However, the deficit will be lower than in 2025, as the federal government expects a slight economic recovery. By implementing short-term labor market support measures, the BA is attempting to reduce the usual time lag between economic recovery and its impact on the labor market, and to reduce unemployment.
Revenue and expenditure
In its 2026 budget, the BA has planned total revenues of €49.23 billion. Contribution income represents the largest block, amounting to €41.12 billion, which is €1.36 billion more than this year. Total expenditure amounts to €52.60 billion, which is around €0.21 billion below the level for 2025.
After settling the pay-as-you-go benefits for insolvency payments and winter employment, the BA will cover the deficit of €3.97 billion arising in 2026 with loans (liquidity assistance) from the federal government. For the current year 2025, the BA is forecasting a deficit of up to €5.23 billion, which will be offset by the full use of reserves amounting to €3.2 billion and federal loans of up to €2.2 billion.
Since the BA will not be able to repay the loans for 2025 by the end of the following year, the debt level at the end of 2026 will total up to €6.22 billion.
More short-term employment promotion and strong support for continuing education
Economic recovery phases usually only impact on the labor market after a delay. In order to minimize the effect as much as possible, the BA will increasingly use short-term, effective funding instruments, such as the integration subsidy for employers.
The budgets for the State Program for the Promotion of Continuing Education are also relevant for securing skilled workers and supporting transformation. A total of €4.12 billion has been earmarked for this, around €0.69 billion more than in 2025. Part of the increase is also due to the assumption of costs for continuing education support for benefit recipients in job centers, which was transferred to employment agencies this year.
High expenditure on unemployment benefits
25.66 billion is allocated in the budget for unemployment benefits. Compared to the expected expenditure for 2025, the estimate has fallen by €1 billion. Five years ago, however, these expenditures were more than six billion euro lower. This shows that higher unemployment has a significant impact on financial results.
This is another reason why, in a more receptive labor market, the BA is investing in quickly effective integration instruments in addition to qualifications in order to prevent or reduce unemployment. With average monthly expenditure of just under €2,300 per benefit recipient—including €986 for social security contributions—the contribution budget can be consolidated primarily through reduced expenditure on unemployment benefits.
Budget based on the federal government's fall forecast
The federal government's fall forecast forms the basis for the BA's budget. Gross domestic product growth of 1.3 percent is forecast for the coming year. At 2.90 million, the annual average number of unemployed is slightly below this year's level but still noticeably higher than in previous years.
The chair of the board of directors, Anja Piel, explains:
"This budget reflects overall economic developments, but above all it demonstrates the responsibility that the Federal Employment Agency is assuming not only during the crisis but also in overcoming it. The employment agencies are and will remain reliably present throughout Germany. The Federal Employment Agency invests in training and continuing education for people in order to build bridges to the labor market and the future. The Federal Agency stands for stability and reliability in times of change and assumes responsibility for society as a whole within the scope of its statutory mandate. The budget of the Federal Employment Agency is expected to end the coming year with a deficit. To ensure that this development does not come at the expense of insured persons, the federal government must create the conditions for sustainable growth and take steps to stabilize the budget.
Christina Ramb, Deputy Chair of the Board of Directors, explains:
“With more short-term and labor market-oriented support instruments, the Federal Employment Agency is making an important contribution to helping unemployed people find work more quickly, even in times of economic weakness. However, an economic upturn is necessary in order to significantly reduce the budget deficit. The federal government should relieve the burden on unemployment insurance by not imposing any further non-insurance-related tasks on it and by no longer financing the existing ones from the contribution budget, but instead reimbursing the costs consistently and transparently.”
Chair Andrea Nahles explains:
“After several years of economic weakness with poor job prospects, economic recovery is expected to begin next year. We are pursuing a dual strategy in this regard. With fast-acting active labor market measures, we want to shorten the usual delay between economic recovery and its impact on the labor market. At the same time, we continue to support companies in securing skilled workers and transformation processes, and invest in training.”