According to the alarming figures published by the German Institute for Economic Research (DIW), the number of people below the poverty line - 14 percent of the total population - expanded by a third in the last ten years.
The study analysed income data from the German Socio-Economic Panel (SOEP), which operates under the DIW. It found that young people between the ages of 19 and 25 and families were at particular risk.
Reasons for the surge in poverty included growing numbers of young people seeking higher education, the extension of time spent training, a precarious post-study job market, and a trend toward leaving their parents' home at an earlier age.
Large families are also at higher risk for poverty, the DIW said. About 22 percent of those with three children are at risk for poverty, while it was more than 36 percent for those with four children.
“Compared to 1998, the poverty risk for homes with many children has risen substantially,” said study co-author Joachim Frick, adding that this was despite an increase in child care facilities and more money for families from the government.
Meanwhile more than 40 percent of single-parent homes are below the poverty line.
The study authors said that increasing the country's Hartz IV welfare benefits would not improve the situation.
“This fails to reach the target,” co-author Markus Grabka said, suggesting instead an “investment in child care and better earning chances for single parents and families with young children.”
The European Union has defined those who earn an income lower than 60 percent of a country's national average as at risk for poverty. For a one person household this means an income of €925, while a couple would need to earn less than €1,388. Meanwhile a couple with one child would be considered poor if they earned less than €1,665, and €1,943 for a couple with two children.