Citizens’ income replaces Hartz IV from January. The Bundestag and Bundesrat finally passed the law on Friday. For more than five million adults and children in the previous Hartz IV basic security, the monthly payments will be increased from the beginning of the year. A single adult will then receive 502 euros per month, which is 53 euros more than before. Couples and children also receive more money. Minister of Labor Hubertus Heil (SPD) said: “Today we are leaving Hartz IV behind and creating a new system.”
The votes in the Bundestag and Bundesrat were necessary because the Mediation Committee had changed some points in the draft law that had already been passed in the Bundestag.
Significant parts of the reform are not to come into force until July 1: The job centers are to draw up a cooperation plan with each and every unemployed person concerned, in which the planned path back to regular work is determined.
The CDU/CSU opposition had prevailed against the traffic light coalition of SPD, Greens and FDP that job centers can sanction those affected with breaches of duty more severely and earlier than originally planned with cuts in benefits. In addition, benefit recipients should only be allowed to keep 40,000 euros of their own assets. Originally, 60,000 euros had been planned.
The Federal Council passed further resolutions on Friday:
- Income tax compensation for inflation. The so-called cold progression, a kind of secret tax increase due to inflation, will be offset in the coming year. The federal, state and local governments will thus forgo tax revenue of 18.6 billion euros in 2023. The federal government wants to relieve tax burdens on 48 million citizens. The basic allowance, i.e. the income up to which no tax has to be paid, increases by 561 euros to 10,908 euros. The top tax rate of 42 percent, which currently applies from a taxable income of 58,597 euros, will only be due in the coming year from 62,827 euros. The federal government is deliberately not touching the limit for the even higher tax rate for the wealthy of 45 percent because it does not believe that additional relief is necessary in this income bracket.
- Temporary continued operation of three nuclear power plants. In view of the energy crisis and the consequences of the Russian attack on Ukraine, three power plants – Isar-2, Neckarwestheim-2 and Emsland in Lingen – will remain online until April 15, 2023. Actually, the last three reactors for phasing out nuclear energy in Germany should go offline on December 31 of this year. Nothing should change about the nuclear phase-out. The law stipulates that only the remaining fuel rods are to be used for continued operation.
- increase in child benefit. On January 1st, the subsidy for the first, second and third child increases to 250 euros per month. From the fourth child and for each additional child, there are already 250 euros today. With the increase, the previous scale based on the number of children no longer applies. Parents currently receive EUR 219 per month for the first and second child and EUR 225 per month for the third child.
- New housing benefit reform. Housing benefit recipients can expect higher payments in the coming year. On average, the rent subsidy for households with low incomes will increase from 180 euros to 370 euros per month from January. According to the law, the number of currently around 600,000 supported households should more than triple to around two million. In future, the calculation of the housing allowance will also take into account heating costs and expenditure on hot water. With a surcharge, rent increases as a result of energy-related renovations are also taken into account. Housing benefit is a benefit for low-income households such as low-income earners and pensioners. How it is calculated depends on where people live, what the rents are there and how many people live in the household.
- Distribution of the climate tax between tenants and landlords. So far, landlords have been able to pass on the CO₂ tax on heating oil and natural gas that has been due since the beginning of 2021 in full to the tenants. In future, the additional costs are to be distributed between tenants and landlords in a tiered model in such a way that tenants have an incentive to save energy and landlords have an incentive to make structural improvements such as modern heating or more insulation.
- Approval of the Triage Act. When allocating scarce hospital beds in a pandemic, only the short-term probability of survival should be decisive for the decision in the future. The Federal Council passed the so-called Triage Act, which is intended to protect people with disabilities from discrimination. Discrimination based on disability, age, gender or origin is expressly prohibited in the law.
The Bundestag had already passed the laws.