faq
The citizen’s allowance, which has replaced Hartz IV since January, is entering the next phase: it is intended to pave the way for almost four million people with basic security through training and further education. The innovations at a glance.
One word is often used when it comes to the second stage of the new citizens’ income: “equal”. After the first stage replaced the Hartz IV, which was unloved by many, six months ago, further regulations will come into force on July 1st. They are intended to improve the lives of people on basic security – but above all to get them back into everyday work. The image of the job center as an authority to which people come as petitioners should also be improved by the citizen’s income. Through appreciation, cooperation and simpler language. What has already changed with the citizens’ income and what is now being added – an overview:
Why did she federal government Hartz IV replaced by citizen money?
The old Hartz IV regulation had too many problems that could not simply be solved by aligning the standard rates with the higher cost of living. 70 percent of the 1.7 million unemployed in the basic security have no formal professional qualifications. 880,000 people are considered long-term unemployed, half of them have been out of work for more than four years. When Hartz IV was introduced in 2005, the situation was completely different – at that time many well-qualified people had become unemployed and could no longer find a job. The job market was the problem, not the qualifications. Today it’s the other way around. Winning the long-term unemployed back into the market is therefore considered an important tool in the fight against the shortage of workers and skilled workers.
What is the difference between the second and the first level of citizen income?
Roughly speaking, the first stage at the turn of the year was primarily about money. The standard rates were raised by 53 euros to 502 euros for single people without children. The second stage is now about services that help to integrate people into the labor market. “After 17 years, this is one of the biggest steps forward,” says Daniel Terzenbach, director of the Federal Employment Agency in Nuremberg. It is about creating incentives to accept educational offers. For example, further training can also be paid for – even with success bonuses. “Until now it was often more financially attractive for a long-term unemployed person to accept a one-euro job than a longer-term qualification,” says Terzenbach.
So it’s about sustainable qualification?
That is the focus. So the “priority of mediation” was abolished. The measures in the context of citizen’s income should, for example, also help to make it less attractive for the unskilled to accept short-term employment.
Instead, the basic income should serve to raise the qualification level significantly, for example with extended training periods for single parents and many other instruments. This also includes holistic coaching, for example for the long-term unemployed. Those who lack reading, math or computer skills can improve these basic skills more easily. According to the Federal Employment Agency, the support is geared more towards the individual life situation and the entry into working life than towards quick placement.
How much does the reform cost?
Lot of money. Because the measures are sometimes very expensive. An example: In the case of citizen benefit regulations, the originally time-limited measures of the so-called Participation Opportunities Act were continued indefinitely. Employers can get up to 100 percent of wage costs reimbursed for a certain period of time if they hire long-term unemployed people and employ them on a long-term basis. That alone is estimated to cost more than a billion euros a year. However, proponents are sure that the expense will be worth it in the long run.
However, these funds must also be available to the job centers. “Additional tasks require more money,” says a joint statement by the Federal Employment Agency, the District Association and the German Association of Cities. In view of the funds already reduced by the federal government in the 2023 budget, the job centers would have to reallocate more than half a billion euros from funds for the integration of long-term unemployed to administrative costs. “This restricts the scope for active labor market policy even further,” criticize the authority and the two umbrella organizations. In many places, the BA as well as cities, municipalities and rural districts jointly run the job centers, which are responsible for the basic income and the long-term unemployed. In the federal budget for 2023, around 43 billion euros are earmarked for financing citizen benefits including housing benefit and other benefits.
What do critics say about the reform?
The Union in particular has repeatedly and sometimes severely criticized the citizen’s income. Bavaria’s Prime Minister Markus Söder (CSU), for example, said repeatedly that the introduction meant a departure from the principle of “support and challenge”. The Saxon Prime Minister Michael Kretschmer (CDU) had raised concerns that a recipient of basic income may be better off than someone who earns 2,500 euros gross in his job. However, such calculations are highly controversial in the professional world. Social associations, on the other hand, state that the standard rates have not been raised sufficiently to cover the increased cost of living.