There are always controversial political debates and rumors spread about citizens’ money. How high are the payouts really, who gets them and who faces which sanctions and when? An overview.
There are many prejudices, discussions and errors surrounding the topic of citizen’s money. With the introduction last year, the traffic light government originally wanted to create a “real cultural change in basic security for job seekers” and focus on “more respect and fair participation”. Now first Labor Minister Hubertus Heil and then Finance Minister Christian Lindner called for a revision of their own law. The opposition CDU would prefer to abolish citizens’ money completely.
Reason enough to take a closer look at the most important questions surrounding citizens’ money. This overview explains how the system works, which population group it supports the most and why hardly any people receive basic security even though they do not depend on it.
What is citizen’s money?
According to the Ministry of Labor, citizen’s benefit is intended to “offer a humane subsistence level to all those who cannot cover their living expenses from their own income and assets.” This affects jobseekers, families, young people on the way to work, older people starting a new career and migrants for whom integration into the German labor market should be made easier.
Citizens’ benefit replaced the previous unemployment benefit II, better known as Hartz IV, at the beginning of 2023. The hope of the traffic light coalition was that work would be more sustainable. The so-called “placement priority” was abolished and new financial incentives for further training were introduced.
Who is entitled to citizen’s benefit?
Citizens’ benefit is available to everyone in Germany who cannot cover their living expenses from their own income and other benefits, such as unemployment benefit, housing benefit or child allowance. Anyone who was entitled to unemployment benefit II or social benefit until the end of 2022 has been entitled to citizen’s benefit since January 1, 2023.
Citizens’ allowance is regularly granted for twelve months. In exceptional cases, benefits can also be approved for shorter periods of time, usually six months. When the approval period ends, the benefits must be applied for again.
How much is the citizen’s allowance?
Since January 2024, the standard rate of citizen’s benefit for a single adult has been 563 euros per month. In addition to the individual citizen’s benefit rate, other costs are also borne by the state. Although citizens’ benefit recipients do not receive housing benefit, the office still covers the costs of a rental apartment. This also includes expenses for hot water and heating. Other services include health care as well as education and participation.
Who receives citizen’s benefit?
There are currently around 5.4 million citizens’ benefit recipients in Germany. The fact is: around 1.5 million people cannot and are not allowed to work at all because they are too young. A large proportion of this group are children and young people. They make up around a quarter of all citizens’ benefit recipients.
Of the remaining 3.9 million, a further 2.2 million people are not available for the labor market. These people are still at school or studying, caring for relatives or taking care of early childhood care.
What remains are 1.7 million unemployed people who are generally able to work. So these people could work, but they don’t – right? It is not that easy.
There are many hurdles to starting work: a part-time job often means only a minimal additional income compared to the citizen’s allowance, but in cases of doubt the job may make childcare necessary. This is one of the reasons why women, on average, are dependent on government support for longer than men with comparable qualifications.
Another problem is the so-called “mismatch unemployment”. That means people don’t have the skills they need for the jobs that are available. According to the Institute for Labor Market and Occupational Research, only 23 percent of the available positions on the German labor market are suitable for applicants without a degree. In addition, not all vacancies are advertised where the unemployed live.
Finally, there is the question of integration. Around 56 percent of the 1.7 million unemployed people who are fit for work are German and 44 percent are foreigners. The largest group of the latter is Ukrainians (168,961), the second largest group is Syrians (123,573), followed by people from other EU countries (113,845).
Asylum seekers are not allowed to work for between three and nine months after arriving in Germany. Studies by the Institute for Labor Market and Vocational Research suggest that the integration of these people into the labor market will take time, but will definitely happen. Of the refugees who came to Germany in 2015, only seven percent were employed after one year, but today that figure is already over 60 percent.
What rules and sanctions are there for recipients of citizen’s money?
According to a report in the weekly newspaper “Die Zeit”, 64 percent of Germans believed at the beginning of this year that there were people who no longer wanted to work because of the citizen’s benefit. However, people who work and take advantage of all available social benefits always have more money available each month than citizens’ benefit recipients who live solely on social benefits.Nevertheless, harsh sanctions for those receiving civil benefit are a recurring topic in political discourse.
Basically, citizens’ money, like the former Hartz IV, is intended as a temporary measure. It is intended to help bridge a phase without work and make it easier to reintegrate into the labor market. Everyone who receives citizen’s benefit undertakes to help get back to work as quickly as possible. This includes complying with reporting obligations and attending regular meetings and consultations. At the beginning of the year, Labor Minister Hubertus Heil tightened the rules for citizens’ benefit recipients.
Since then, the job centers have been able to completely cancel the citizen’s benefit for unemployed people for a maximum of two months if they refuse to work. However, this is only possible after repeated refusal. In a resolution paper from this week, the FDP is now calling for even stricter sanctions. In the future, those who refuse to work should be able to have their benefits immediately reduced by 30 percent. According to a ruling by the Constitutional Court, this would be the highest permissible reductionof social benefits.
According to calculations and assessments by experts, the number of people actually affected will remain manageable. Among the 5.8 million people entitled to civil benefit in 2023, only a few thousand cases were recorded in which work or measures were refused.
Sources:Federal Ministry of Labor“Time“; “Business Week“, NTVwith material from the DPA