There will be a lot of excitement in the Bundestag this Thursday: the federal government and the Union are arguing about the citizen benefit that is to replace Hartz IV on January 1st. There are allegations of fake news and concerns about whether work will still be worthwhile in the future. The most important questions and answers:
How does citizen income differ from Hartz IV?
With the citizens’ income, the state wants to show a friendlier face and conserve savings more. In particular, the chancellor party SPD wants to leave behind the legacy of Agenda 2010, which they believe has damaged large parts of the party. Compared to Hartz IV, there should be more money for the benefit recipients in the future, the standard rate should increase from 449 to 502 euros, i.e. by around eleven percent.
In the so-called waiting period, the first two years in which you receive citizen income, the state will pay the rent or installments for your home in future in unlimited amounts as well as the heating costs. Anyone who slips into citizen income will then no longer be forced to move, at least initially, no matter how big and expensive the apartment is. The idea behind it: people should be able to concentrate on their job search instead of struggling with the search for an apartment.
In addition, recipients of basic income are allowed to keep significantly more assets: during the grace period it is 60,000 euros, for each additional person in the household 30,000 euros are allowed. A third difference is in sanctions. In the first six months – the so-called trust period – recipients can have up to ten percent of their basic income reduced, for example if they repeatedly miss appointments at the job center. After the six months, there can be cuts of 20 or 30 percent, for example, if someone does not take up a reasonable position. The sanction rules for Hartz IV are stricter.
In addition, the coalition wants to make it possible for recipients of basic income allowance to receive training or further education more often, instead of placing people as quickly as possible in jobs that are often temporary jobs. There should be a monthly bonus for further training. In addition, recipients of citizen income should be allowed to keep more of the money that they earn, for example through a mini job. So far, they have had to give up up to 80 percent of every additional euro earned.
What are the points of contention between traffic lights and Union?
The CDU and CSU primarily criticize the waiting period and the period of trust. Due to the trust period, people would no longer be challenged appropriately and would be spared too much for six months, Union politicians argue. The second point of criticism is that the waiting period means that assets that are too high are not used for too long. This would finance people on low incomes for the unemployed, who sometimes had six-figure cash assets – which they would not have to touch. In addition, the Union argues that working on citizen income is no longer worthwhile.
Do you have more as a citizen income recipient than someone who goes to work?
It depends. Calculations by the DGB and also by economic research institutes come to the conclusion: As a rule, you have more when you work. The calculation models are complicated, the results individual, because many elements have to be taken into account, such as additional benefits for children, the new housing allowance or rent. This can be much higher in Munich than in Görlitz, for example. Experts say that work can be less attractive from a purely financial point of view, especially for parents with several children. But many people still went to work because it gave them a job – even outside of the family.
How likely is it that reform will be delayed?
At the moment it looks very much like it. The traffic light coalition and the Union got stuck in a dispute on the points mentioned. The parliamentary groups of the governing parties in the Bundestag have already made changes to the draft law by Labor Minister Hubertus Heil (SPD), thereby accommodating the Union. For example, heating costs during the waiting period are no longer automatically taken over by the job center, but only if they are “reasonable”. If you heat too much, you have to bear the additional costs yourself.
However, these changes are not enough for the CDU and CSU. You have announced that you will reject the Citizens’ Income Act in the Bundesrat and stop it, because there the federal states in which the CDU or CSU are co-governing would also have to agree. In this case, further negotiations would have to be carried out.
The traffic light parties accuse the Union of spreading fake news with false numbers. Is that correct?
The CSU had sample calculations citing Focus Online spread on social media which appear to be misleading. According to this, a family with two children and a sole breadwinner who works full-time for the minimum wage would have 783 euros less than the same family receiving citizen benefit.
However, important social benefits for the family with income from work, such as child allowance and housing benefit, are not taken into account. The housing benefit should be increased significantly. The German Trade Union Confederation created a counter-calculation that takes such elements into account. According to this, families with earners end up with 731 euros more in their pockets than those on citizen income.
What do future citizens’ income recipients say about the reform?
For example, Thomas Wasilewski from Mönchengladbach, 59 years old, will receive citizen benefits in the future. He is unable to work because of a heart condition, the family of five lives on Hartz IV. “The dispute between the federal government and the Union distracts from the essentials,” he says. The vast majority of recipients, like him, have no assets to spare and are not affected by sanctions. “The main problem is the increase of only about 50 euros,” says Wasilewski. “That’s just not enough.”
Food, for example, has not become ten percent more expensive, but up to 30 percent. Or the electricity costs: Wasilewski says the rates for his family are 120 euros a month. That worked until the beginning of the year. “Now we save a tenth of our electricity consumption every month. Nevertheless, we pay 194 euros – and have to save the difference from our mouths.” He sees it like the social associations: They demand that the standard rate must increase by 200 euros.