Missing Link: Digital restart of the welfare state to end red tape

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Germany affords itself one of the most comprehensive welfare states in the world. However, the system is in danger of stagnating under its own weight. Many citizens can barely figure out which benefits they are entitled to in which life situation; case workers in the authorities are working at the limit of their capacity. The welfare state structure has grown organically over decades, reaching a complexity that is not only frustrating for those affected but also leads to massive efficiency losses. In this tense situation, exacerbated by the shortage of skilled workers in administration, the Commission for Welfare State Reform (KSR), established in September 2025, recently presented its final report.

The committee, composed of representatives from federal ministries, states, and municipal associations, saw its mandate as a wake-up call for a "digital restart." Therefore, it is not just about fine-tuning existing laws but about a fundamental reorientation.

Federal Minister of Labour Bärbel Bas (SPD) summarizes the ambition as follows: "Our welfare state must become fairer, simpler, and more digital. To this end, the Welfare State Commission has presented an ambitious package of recommendations to make social administration and social law more citizen-friendly." The goal is to make the welfare state tangible as a capable institution that supports people in everyday life rather than discouraging them through bureaucratic hurdles.

The Missing Link: End-to-End Digitalization

Until now, digitalization in public administration has often been considered a downstream project, a kind of icing on the cake of existing analog processes. The KSR breaks with this logic and dedicates its own central chapter to digital organization in the report. It no longer sees digital processes as a supplementary modernization project but as a prerequisite for more efficient workflows. Without a technological leap, the level of social protection will simply not be sustainable given the shrinking personnel resources in the authorities.

The core of the outlined transformation is the consistent "end-to-end digitalization" of application and administrative processes. Currently, social administration is characterized by a highly fragmented IT landscape with numerous specialized applications that barely communicate with each other.

To remedy this deficiency, the commission proposes the use of the Germany Stack, which is already widely discussed elsewhere: a technically sovereign technology platform that defines uniform standards and interfaces for all government applications. It would provide modular basic services such as cloud services, authentication services, and a bidirectional mailbox function. These would have to be used equally by the federal government, the states, and municipalities.

Central Portal: One Window to the State

For citizens, access to the welfare state is to be radically simplified. Instead of struggling through a jungle of different offices and websites, according to the report, a single digital access portal will become the primary point of contact. All interactions will be handled through this portal – from information about possible entitlements to submitting applications and retrieving decisions. Prospectively, payments could even be made through it. This one-stop-shop principle is to be mandatorily secured by a connection and usage obligation for all federal levels.

This is about more than just a slick user interface. The commission calls for the implementation of the Once-Only Principle. This means that once data has been stored with an authority, it does not need to be resubmitted with every subsequent application. It's not the citizens who should run around, but the bits and bytes: the authorities exchange the required information in the background.

A key lever for this is the use of the tax identification number (Steuer-ID) as a cross-register identification feature. According to the KSR, only this can ensure that individuals can be uniquely identified across different systems. This is the basis for automated processes.

However, such an approach has long been a red flag for data protectionists. With the Register Modernization Act, the tax ID already became an identification and citizen number for general purposes outside the tax administration, criticized, for example, by the then Federal Data Protection Commissioner Ulrich Kelber in 2023. Even this is equivalent to the introduction of a cross-sector personal identification number, which makes it "excessively" easy to create profiles and thus endangers the "particularly protected intellectual inner space" of citizens. There are no sufficient safeguards to effectively prevent misuse.

In 2021, researchers, experts, and civil rights advocates also strongly opposed the register reform. The KSR initiative could significantly exacerbate this already constitutionally critical situation.

Algorithms in the Service of Social Security

Another controversial point is the recommended increased use of Artificial Intelligence (AI) and automation in administration. The KSR advises that purely rule-based processes without any discretion should be largely automated.

What could possibly go wrong? The Dutch authorities once wanted to use a system for automated risk detection to find out whether and which citizens might be defrauding the state by unjustly receiving housing benefits, unemployment benefits, or other social benefits, committing tax fraud, or working undeclared. With this "System Risk Indication (SyRI)", the Netherlands, according to the UN Special Rapporteur on extreme poverty and human rights, Philip Alston, established a "surveillance state for the poor." He therefore supported a lawsuit by human rights groups and affected citizens against this social scoring system.

In more complex cases requiring discretionary decisions, AI should only support case workers, according to the KSR. The final decision must always remain in human hands, it demands. This would free up capacity, allowing employees in the authorities to focus more intensively on individual advice and support.

EUDI Wallet for Proofs

Another important component of the commission's technological vision is the integration of the European Digital Identity Wallet (EUDI), which will be available throughout Europe from 2027. This digital wallet on the smartphone is intended to be much more than just a replacement for the ID card. The commission insists on systematically preparing key proofs for provision via the EUDI wallet in order to make identification and proof of eligibility an integrated part of government processes.

As a concrete first step, the experts propose digitizing the severely disabled person's ID card and designing it to meet EUDI requirements. To this end, the federal government should create a legal basis promptly. From a technical perspective, the EUDI wallet offers the opportunity to take the Once-Only Principle to a new level. Instead of scanning documents or laboriously sending them by post, citizens could securely transmit required proofs directly from their wallet to the social security authorities.

However, resistance from civil rights organizations is looming here. The American Civil Liberties Union (ACLU), the Electronic Frontier Foundation (EFF), and Epicenter.works are already levelling serious accusations against the planned EUDI implementation. They fear that issuing authorities could, in principle, be able to track every use of the digital identity. Such a "phone-home function" must be strictly excluded, emphasize the representatives of civil society. There should be no actor who can centrally monitor interactions and link information from e-government, banking transactions, or social network logins.

In addition, there is the accusation from Epicenter.works that the EU Commission is trying to introduce a lifelong personal identification number "through the back door." Although the legislator had actually decided against a "unique and permanent identifier" for online wallets, the Brussels government institution seems to repeatedly adopt this approach in the implementation of the regulation.