A proposal from the North Rhine-Westphalia state association, slated for discussion at the CDU’s federal party conference in February, seeks to address a growing problem: the exploitation of social welfare systems through fraudulent rental practices. The plan, reported by “Bild am Sonntag,” would empower police and fire departments to directly report uninhabitable properties to job centers, potentially halting benefit payments.
Fraudulent Practices Target Vulnerable Populations
The scheme, often referred to as “Schrottimmobilien” (junk property) fraud, involves criminals acquiring dilapidated properties – frequently through overbidding at forced auctions – and quickly filling them with socially disadvantaged individuals, often from Eastern Europe. Social benefits, including housing, citizen, and child allowances, are then claimed for these individuals, with the funds ultimately flowing to the criminals acting as landlords, often without the knowledge of the tenants.
The properties are often left to decay, and the purchase price is frequently not paid, leaving cities with the costly task of clearing the buildings. This practice contributes to urban decay and the impoverishment of entire neighborhoods, particularly in areas like the Ruhr region.
Political Responses and Proposed Solutions
The CDU proposal also calls for a fraud central registry to connect registration offices, family offices, and social welfare agencies. Furthermore, it suggests stricter penalties for those convicted of the fraud, including “easier deportation of EU foreigners including the possibility of a re-entry ban.”
Beyond the CDU’s initiative, Labor Minister Bas announced plans last autumn to combat this type of fraud, proposing a cap on the rents paid by authorities per square meter to prevent exploitation. Several federal states have also begun initiatives to help cities purchase and demolish these properties.
Kindergeld and EU Regulations Under Scrutiny
The CDU is also considering reforming the payment of child benefits abroad. According to CDU General Secretary Linnemann, child benefit fraud has become a tactic used by criminal gangs. He argued that child benefits should be adjusted to reflect the cost of living in the recipient country, citing the current payments to countries like Romania and Bulgaria as “completely disproportionate” due to lower living costs.
On Friday, the Federal Council approved a resolution proposed by the black-green-led state of North Rhine-Westphalia, which includes granting cities and municipalities the right of first refusal at forced auctions and allowing for immediate re-auctioning if the purchase price is not paid. The federal government is not legally obligated to respond to resolutions passed by the Federal Council.
Frequently Asked Questions
What is “Schrottimmobilien” fraud?
“Schrottimmobilien” fraud involves criminals acquiring dilapidated properties and fraudulently claiming social benefits for individuals housed within them, often exploiting vulnerable populations from Eastern Europe.
What actions are being proposed to combat this fraud?
Proposed actions include allowing police and fire departments to report uninhabitable properties to job centers, creating a fraud central registry, increasing penalties for offenders, and potentially easing deportation procedures for EU citizens involved in the fraud.
What role does the Kindergeld (child benefit) play in this issue?
The CDU is considering reforming the payment of Kindergeld to reflect the cost of living in the recipient country, arguing that current payments to some EU nations are disproportionately high and susceptible to fraud.
As these proposals move forward, will the German government be able to effectively balance the need to protect social welfare funds with the rights and freedoms of EU citizens?
