“The introduction of citizen’s income on January 1 will be one of the biggest social reforms in the past 20 years,” said Federal Labor Minister Hubertus Heil (SPD) in the debate in the Bundestag. There, the new citizens’ income will be discussed in the first reading this Thursday. The most important questions and answers about the new rules.
What is the core of the reform?
From January 1, 2023, millions of people in need in Germany are to receive more money and better care in the job center with the citizens’ allowance. It is intended to replace Hartz IV in its current form for the more than five million affected.
Why should Hartz IV be replaced?
The labor market reforms introduced by the then federal government under Chancellor Gerhard Schröder – named after their inventor, the former VW manager Peter Hartz – were controversial from the start. The Hartz IV standard rate was considered by many to be too low. The reforms introduced under the motto “Fördern und Demanden” were considered too harsh, because the job centers had the right to reduce or cancel benefits for applicants if they did not meet certain requirements.
According to Heil, the reform aims to achieve two goals. First, the government wants to “reliably protect people who are in existential need”. The Corona crisis has shown how quickly people can find themselves in existential need, according to the Labor Minister.
The second goal is to free those who are in need from this need as quickly as possible. The situation is different today than when Hartz IV was introduced in 2005. Unlike back then, when there were almost five million unemployed, there is now a shortage of skilled workers. In Germany there is still a base of long-term unemployment. Data showed that a large proportion of these long-term unemployed have not completed vocational training. The government wants to change that. “Training instead of a temporary job” is the motto.
How high will the citizen money be?
According to Heil’s plans, the standard rate for single adults should be EUR 502 a month – more than EUR 50 more than before. Adults living with partners receive 451 euros. Young people from the age of 14 get 420 euros, children from 6 to 14 years 348 euros, children under six 318 euros.
What will change in the rules for those who receive the benefits?
In the future, job seekers should Job centers less pressure be exposed. In this way, people who do not cooperate with the job center should fear fewer sanctions. The new head of the Federal Employment Agency, Andrea Nahles, said in an interview with the editorial network Germany, that service recipients remain obliged to cooperate. The core of the new citizens’ allowance is a strengthening of “training, further education and training” – “instead of placing people by hook or by crook in any job.”
Another key point is the so-called trust time: Those who lose their jobs are largely left alone for the first six months. The possibilities for reducing benefits should be severely restricted during this time. Payments should only be reduced in the event of missed appointments at the job center. In the case of breaches of duty, such as not accepting reasonable work, there should be no more sanctions in the first six months. Later, in the event of repeated breaches of duty and failure to report, a maximum of 30 percent of the standard requirement can be reduced. Accommodation and heating costs are not reduced.
In the future the Inflation not after the fact taken into account when setting the standard rates, but rather the rate of inflation to be expected in the future is taken as a basis for the development of the basic security benefits. “It’s a big step forward,” the minister said. “The standard rates for citizen income will not only lag behind inflation,” said Heil.
What are the opposition’s main criticisms of the reform?
Opponents of the reform criticize above all that there are no longer any obligations for the unemployed. This would remove the pressure to return to paid work. According to the Union, the traffic light coalition hands over sanctions to recipients who refuse to work without need. “They want more performance, significantly fewer duties to cooperate and less placement of work,” says Stephan Stracke, the labor market policy spokesman for the CDU/CSU parliamentary group.
CDU leader Friedrich Merz also spoke of “social tourism”. People from other countries would be attracted by citizen income and other social benefits. The Minister of Labor in the Bundestag sharply criticized this statement, without naming Merz: “Personally, I think it’s indecent to play off low earners against the needy and the needy against those who are fleeing, that’s not right,” said Heil.
The left criticizes the plans of the traffic light government from a completely different direction: They demand a surcharge of 200 euros on the current standard rates to compensate for the exorbitantly rising energy prices. The 50 euros that Heil now wants to grant to the beneficiaries are not a real increase, but purely a compensation for inflation. Heils Law is “not an overcoming of Hartz IV”.
Is citizen income a reaction to the economic crisis triggered by the war in Ukraine?
No, the citizen money had been planned long before the start of Russia’s attack on Ukraine. It is one of the central projects of the traffic light coalition, on which the three coalition partners have agreed. Heil emphasizes that the reform is linked to efforts to make people on low incomes better off. work must be worthwhile. There must be a gap between citizen income and income from work, which is why the traffic light government has specifically helped low earners, for example by reducing social security contributions.