Between 3.1 and 4.9 million Germans earn or own little enough to receive state benefit but have not registered for it, according to a study carried out by the Institute for Employment Research, Der Tagesspiegel daily paper reported.
This has a significant impact on calculating state benefit, which is based upon what the lowest-earning 20 percent of the population spends, but excludes those on benefits to avoid creating a downward spending spiral.
The Institute for Employment Research estimates that without the so-called “hidden poor,” the calculated average spending among the bottom fifth of single people and couples with children would rise by up to 2.4 and 5.5 percent respectively.
While the Federal Labour Agency considers the scale of hidden poor “considerable”, it has shown no willingness to increase state benefits accordingly, a stalemate that Germany’s Left Party has sharply criticized.
“Considering the humiliating procedures at job centres it’s no wonder that millions refrain from taking money … Deterrence through discrimination saves the state at least €20 billion a year,” its leader Katja Kipping, told Der Tagesspiegel.