Germany's payment card scheme for asylum-seekers

The federal government is planning to amend Germany's Asylum Seekers' Benefits Act to allow local authorities to pay asylum-seekers state benefits through payment cards, rather than in cash or vouchers.

The new law still has to pass the parliament, the Bundestag, but the draft's current wording is: "If benefits in kind for necessary personal needs are not possible through reasonable administrative effort, benefits in the form of payment cards, vouchers, other comparable non-cash settlements or cash benefits may be granted."

How do the payment cards work?

The idea is to issue asylum-seekers with a card, on which most (but not all) of their state benefits are booked once a month.

Since asylum-seekers do not yet have residency status in Germany, they can't have their own bank account and cannot legally work until they have been in the country for at least three months.

Up until now, local authorities have paid asylum-seekers a monthly state benefit of around €400 - €500 ($430 - $540) in cash or in vouchers.

Asylum-seekers can use the bank debit card in any shop where normal credit cards are accepted (which excludes many small businesses in Germany) — but, depending on rules put in place by local authorities, they may be restricted to certain postcodes, and online payments can be banned.

All 16 German states have agreed to implement some kind of payment card system, but they can all introduce different rules on how restrictive they are — the Bavarian government, for instance, said it wants to ban the card's use for "certain types of business" (it doesn't specify which). This might exclude, for example, the gambling industry.

Hamburg's "SocialCard" is the least restrictive model, allowing asylum-seekers to use the card anywhere, and even allowing them to withdraw a small amount of cash from cash machines.

The states had called for unified rules, to avoid a "patchwork" across the country. A tender will go ahead to find a service provider to set up the technical infrastructure for the cards nationwide.

Why are all the German governments so keen on a payment card?

The official purpose of the payment card, as spelled out in a meeting of the 16 heads of the state governments, is "reducing the administrative burden on local authorities, preventing the possibility of transferring money from state support to countries of origin and thus combating the inhumane crime of people smuggling."

Some local authorities have had pilot projects in place for several months, and have reported that it reduces the bureaucratic and security concerns associated with having large amounts of cash available at the start of every month. Some have also reported that the card helps ease social tensions, and helps migrant families to budget better.

Less officially, politicians hope the card will discourage uncontrolled migration, and so win back voters from the far-right.

What are the objections to the payment card?

Critics say the cards are overly restrictive and discriminatory, and so will only deepen divisions in society. Green Party Bundestag member Karoline Otte told the news portal t-online, for example: "The planned payment card prevents integration. The payment card plays into the hands of right-wing extremists."

Some critics of the payment card want exceptions for asylum-seekers who have already been in the country for a long time or have found an apprenticeship or study place. Those details are yet to be hashed out.

Meanwhile, migration researchers say there is little evidence to suggest that migrants send the social benefits they get back home, or that social benefits are a significant "pull factor."

"The current studies suggest that social benefits, or the manner in which they are paid, have no influence on migration in and of themselves," Lena Frerichs, legal expert at the Gesellschaft for Freiheitsrechte (Society for Freedom Rights — GFF), told DW. She says research suggests that most migrants only send money back home when they have enough to spare: In other words, when they are working and earning money.

"It seems to me that this card has a political aim, and one that it doesn't necessarily attain," Frerichs said.

Edited by Rina Goldenberg

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