One in seven people is now defined as living on or below the poverty line, according to a report. Families with children and young people were particularly likely to struggle for money, researchers found.
People aged 19 to 25 appear particularly likely to be affected
The proportion of people defined as being "at risk of poverty" in Germany has risen significantly over the course of a decade.
Some 11.5 million Germans, 14 percent of the population, fell into that category in 2008 - about a third more than ten years earlier.
Children and young people are particularly hard-hit, according to a study by the German Institute for Economic Research (DIW) released on Wednesday.
Young particularly vulnerable
Nearly a quarter of 19 to 25-year olds were defined as being at risk of poverty - having an income of less than 60 percent of the national average. The gross average annual salary for a German employee is about 30,900 euros.
Poverty levels were high for large or single parent families
According to researchers, poverty among the young was on the increase because of longer periods of education and training, poorly paid jobs and a trend of leaving home earlier.
Numbers also peaked for families with three or more children. About 22 percent of families with three children were at risk, while the figure for those with four children was 36 percent.
The level for single parent families with children was highest - at 40 percent.
In need of helping hand
Increases in Germany's Hartz IV welfare benefits would not go far enough to solve the problem, report co-author Markus Grabka said.
"Investment in child care and better earning chances for single parents and families with young children would seem more sensible," said Grabka.
The report found that poverty did not appear to be a problem for the middle-aged, those at the end of their working life and the recently retired, although levels were higher for those over the age of 75.
Editor: Andreas Illmer