Germany's prepaid card scheme for asylum seekers sparks outrage over harsh limits
A new prepaid card system for asylum seekers has faced sharp criticism for making daily life harder. The Workers’ Welfare Association (AWO) released a report titled Restricted Participation, Misguided Impact, highlighting the scheme’s flaws. Across 13 federal states, cash withdrawals are now limited to just €50 per month, adding to the difficulties. The prepaid debit cards were introduced to streamline payments, but they have instead created more problems. Many shops refuse to accept them, leaving users with no choice but to buy essentials from pricier stores. Basic tasks like weekly grocery shopping, paying for mobile contracts, or setting up standing orders have become far more complicated.
The system has also brought extra bureaucracy. Far from reducing administrative work, it has added new processes that cost time and money. Taxpayers now foot an estimated €68 million annually for state-level expenses, with municipalities paying around €86.5 million on top. Transfers between cards require prior approval, and international payments are banned outright. The AWO argues that these restrictions hit children and teenagers the hardest, undermining social inclusion. Their report stresses that the credit-based approach has failed to deliver on its promises.
The prepaid card scheme has proven costly and inefficient. Withdrawal limits, rejected payments, and bureaucratic delays continue to disrupt daily life for asylum seekers. The AWO’s findings suggest the system needs urgent review to address its unintended consequences.
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