BA budget: Only a slight surplus in 2019

The Federal Employment Agency (BA) has increased its spending on unemployment benefits over the past year due to the state of the economy. The surplus of 2.1 billion euros is considerably lower than in previous years. A deficit of 1.3 billion euros is expected for this year.

14 Jan 2020 | Press release no.4

Slight surplus thanks to healthy employment

The 2019 financial year ended with a surplus of 2.1 billion euros. This result is around 1.6 billion euros better than originally expected but well below the surpluses from previous years. The figure stood at 6.2 billion euros in 2018. The Federal Employment Agency (BA) held 25.8 billion euros in reserve funds at the end of the year.

Christiane Schönefeld, Chief Financial Officer of the Federal Employment Agency:

“The times of strong surpluses are over. The labour market situation is currently uncertain, and we’ll have to monitor the economic developments. Employment is high, but our expenditure is rising noticeably in areas like unemployment benefits and reduced working hours. We’re expecting a deficit in the current budget. We’ll tap into the reserves if necessary. The BA will invest even more in further education this year to tackle the increasing shortage of skilled workers. No constructive further training for our customers will fail due to a lack of funds”.

Economic downturn has led to increased spending on unemployment benefits

Spending on certain services has risen over the past year as a result of the economic downturn. A total of 15.0 billion euros was spent on unemployment benefits (1.3 billion euros more than in 2018), while 842 million euros was spent on insolvency benefits (+254 million euros). The BA had to increase its funding throughout the year, as its planned expenditure was not enough.

Expenditure as a result of reduced working hours for economic reasons has risen by 98 million euros to 157 million euros over the past year. This rise was caused by the economic downturn, but it was lower than forecast in the budget.

The BA provided a total of 1.5 billion euros in funding for training courses for unemployed people and workers – 195 million euros more than in 2018.

Different signs in 2020 – deficit expected

The 2020 budget forecasts a deficit of around 1.3 billion euros, which the BA will cover with its reserves. This has been affected by the renewed reduction in the contribution rate, which fell again at the start of the year and now stands at 2.4%. The deficit expected for this year comes as a result of increased spending on further training and unemployment benefits.