Budget of Federal Employment Agency well positioned for upcoming tasks

The administrative board of the Federal Employment Agency (BA) today adopted its budget for 2022. It is on this basis that the BA will be able to provide the necessary support for training, employment and qualifications in the upcoming year.

12 Nov 2021 | Press release no.38

For the upcoming year, the BA has planned total expenditure of just under 38 billion euros. After record spending of 61 billion euros in 2020 and an expected 58 billion euros for the current year, planned spending is approaching pre-crisis levels. The decrease has occurred, above all else, due to the expected fall in expenditure on short-time work and unemployment benefits. 

The BA is also expecting its revenues to increase. For 2022, revenues of just under 37 billion euros are have been forecast, an increase of 3.2 per cent.

Deficit expected to continue – no reserves

The pandemic has meant that the BA is continuing to forecast that it will require a subsidy which, according to the first government draft of the 2022 federal budget, will be paid by the federal government. Because of the high deficits in 2020 and 2021, the reserve of almost 26 billion euros has been depleted. For both years, the federal government is to provide almost 24 billion euros. From 2023 onwards, a surplus is expected for the first time once again, as long as the general conditions remain unchanged.

Two billion euros for investment in further training

In the upcoming year, investments in further training and qualifications will also be in focus, and will be included in the budget to the total amount of 2 billion euros. Of this amount, almost 900 million euros are being allocated to the qualification of employed persons, as structural changes and advancing digitalisation are changing the labour market.

The BA is able to support young people in their transition from school to working life with roughly 1 billion euros. This includes career guidance, preparation measures for working life and assisted training for young people with special needs.

Expenditure on unemployment benefits and short-time working allowances expected to fall

The BA has allocated approximately 15.9 billion euros to unemployment benefits, 3.2 billion euros less than in the current year. 1.7 billion has been earmarked in the next budget for cyclical short-time workers. In the current year, the BA is expected to spend approximately 20 billion euros on short-time working allowances and the reimbursement of social security contributions to employers. Once again, the requirement here is that the general conditions do not deteriorate again.

Temporary staffing requirements for pandemic-related additional workloads to continue

The administrative board also approved a pandemic-related staffing requirement of approximately 3,300 employment opportunities. This means that above all else, temporary employment contracts can be extended to this extent in 2022. This will continue to allow the BA to cushion the additional tasks caused by the pandemic. For example, the BA is required to carry out over one million final audits for completed short-time work, which will last until 2023.

Chair of the Administrative Board, Anja Piel:

“The situation on the labour market appears to be easing further. Despite this, we are facing considerable challenges – the number of people in long-term unemployment is continuing to increase, despite all our efforts unemployment is becoming entrenched, while transformation and structural changes in the economy will ask a lot of companies and employees in the years to come. With its budget, the administrative board is trying to create the basis for ensuring that both unemployed and employed persons receive sufficient support and assistance. The next federal government must continue to actively support the labour market, and to do this, the Federal Employment Agency will need to be debt-free in the future. The staff team at the BA are continuing to work at full pelt to come to grips with the payment of benefits at the same time as the large number of final audits for the short-time allowance and all the other tasks in the areas of advice and the placement of jobseekers. To this end, the administrative board is also trying to create the necessary staff-related framework with this budget.”

Deputy Chair of the Administrative Board, Christina Ramb:

"The budget adopted today by the administrative board will ensure that the BA is able to act effectively in a challenging future on the market for training and labour. For companies, securing skilled staff and the structural changes in the German economy are taking centre stage. In this respect, dual vocational training, welcoming skilled workers from abroad and the further qualification of employees are key concerns. These priorities are also reflected in the budget of the BA. The message is: necessary qualifications won’t lose out in the budget for inclusion and further training. The placement of jobseekers and the provision of advice will be strengthened through staff-related and organisational measures. Investments are being made in further extending the digital services offered by the BA. In this way, the self-administration of the BA is creating good framework conditions for an efficiently-functioning labour market.”

Chief Financial Officer Christiane Schönefeld:

“After two crisis years with historically high expenditure, we are now presenting a budget that approaches the pre-crisis levels. As long as the framework remains favourable, we will again be able to build up a supporting financial reserve for periods of economic difficulty in small steps from 2023 onwards. The crisis has clearly shown how valuable our 26 billion euros of financial reserves were. We are accompanying the changes in the labour market with strong investments in qualifications for the unemployed and employed. More than two billion euros are available for the further training of people who are unemployed and employed.”

Please note

The budget of the BA is yet to be finally approved by the federal government.

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