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BA budget 2017 closes with good results

The Federal Employment Agency (BA) closed the fiscal year of 2017 with a surplus of € 5.95 billion.

11 Jan 2018 | Press Release No. 3

The outcome of the year-end audit was better than predicted in the 2017 budget using, as its basis, the benchmarks of the Federal Government, by € 1.50 billion.

According to Ms. Valerie Holsboer, Executive of the Board of Resources at the Federal Agency:

"We have done well, but we also know that good budget outcomes start the debate on the contribution rate. The financial crisis of 2009 showed that the Federal Agency needed at least € 20 billion in reserves to finance, for example, short-time work allowance. Should a contribution rate reduction come into question starting with 2019, then we consider a reduction of 0.2 percentage points to be justifiable. The lowering of the contribution rate is not the responsibility of the BA, rather, it requires a decision by the legislative body, just like the of the establishing of the date for an increase, if a certain amount of reserves is not exceeded."

The good situation on the labour market has led to significantly lower expenditure over the course of the past year. Due to the high labour demand, the number of unemployed continued to decline. As a result, the BA recorded lower levels of Unemployment Benefit I payments, and was, with € 14.02 billion, approximately € 1.57 billion under the planned amount. The good economy was also reflected in the expenses for insolvency aid payments, which was € 0.21 billion below expectations.

Regarding payouts for active employment promotion, a total of € 8.00 billion was spent. As a result, spending was around € 1.90 billion below the expected amount, due to the high labour demand.
Employment and wages turned out to be more positive over the year than expected. There was an income of € 370 million more in unemployment insurance contributions than budgeted.

Approximately € 5.79 billion of this surplus will be added to the reserve of the BA, which will thus increase to around € 17.2 billion. The remaining surplus of € 160 million goes to the Insolvency Aid and Winter Employment Promotion reserves.

For information:
Unemployment Benefit I (Arbeitslosengeld I) is an insurance benefit that is financed by contributions from employees and employers. Information about this can be obtained from the budget of the Federal Employment Agency (BA).
In contrast, Unemployment Benefit II (Arbeitslosengeld II, also called Hartz IV) is a support payment for job seekers, which is financed by taxes, not by the unemployment insurance.

Information about the radio service of the Federal Employment Agency can be found in our audio section.