The account is overdrawn, the monthly bills have not been paid and still they keep piling up. Diakonie Deutschland -through a co-published press release- revealed that more and more people in Germany find themselves in financial need as a result from the COVID-19 pandemic. A survey made by the Working Group Debt Counselling of the Associations (AG SBV) showed a significant increase in the first half of 2021 of requests for financial advice from non-profit debt counselling centers. A total of 461 advice centers took part in the study, including almost 300 from Diakonie Deutschland and Caritas.
Maria Loheide, Head of Social Policy at Diakonie Deutschland, explains that the “increasing demand for social debt counselling is alarming. At the beginning of the pandemic, many people were able to keep themselves afloat financially through reserves or privately borrowing money. However, now, many can no longer compensate for their over-indebtedness.”
Non-profit social debt counselling in Germany is free, but limited by law to certain groups. Diakonie Deutschland and Caritas are calling for counselling accessibility to be expanded to include other target groups, such as employed, short-term employed and self-employed people.
Due to the increase on the demand for advice for rental and energy debts and because energy prices have risen in the months after the survey, both organisations are in favour of an effective climate policy. Eva Welskop-Deffaa -newly elected President of the German Caritas Association- explained that “we are not only demanding adequate financing of debt counselling and the continuation of free energy counselling for low-income households. Above all, we need compensatory measures such as a climate bonus.”
Alongside increasing demand for financial advice and accessibility limitation, debt counselling centers remain inconsistently financed and underfunded, which impacts the number of people that receive assistance. “We urgently need more capacities in the debt counselling centers. The employees in the advice centers are working over their limit, and not just because of the pandemic”, adds Loheide. “The funds must be increased quickly, by at least 20 percent.”
The COVID-19 pandemic has had a devastating impact across the world leaving no one untouched, the new reality has obliged people to adapt their lives to accommodate the changes. Throughout the crisis, Eurodiaconia members have been offering front line services to people in need. Together with our members, Eurodiaconia will continue its advocacy work to ensure that the EU recovery plan benefits the poor and vulnerable and ensuring no one is left behind in the process.
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