FAQ
As of: 11/01/2022 5:42 p.m
The Union puts the traffic light government under pressure when it comes to citizen income. It demands far-reaching changes and otherwise threatens to be blocked. What are the sticking points and what could a compromise look like?
the initial situation
In fact, citizen income is on the political home straight. It is to replace Hartz IV on January 1st. The draft law from the House of Labor and Social Affairs Minister Hubertus Heil is ready, but considerable differences between the government and the opposition already emerged during the first consultation in the Bundestag in mid-October.
In the Bundesrat, the federal states called for improvements, especially with regard to the distribution of costs. The law requires the approval of the federal states, so it doesn’t work without it. The Union is now threatening to block the law. Then it would be up to the mediation committee and a start on January 1st would be unrealistic.
The traffic light government must therefore approach the Union and quickly find a compromise. The Union, in turn, must be careful not to stand in the way of blocking social reform. After all, it is about concrete help for millions of people in times of high food prices and expensive energy.
What does the Union criticize about citizen money?
In view of inflation, the CDU and CSU are also in favor of higher standard rates at the turn of the year. They should increase by around 50 euros, to 502 euros for single adults. Rather, the Union’s criticism is directed at individual rules which, taken together, they believe create “wrong incentives”. The sticking points for the Union are: saving assets, trust time, apartment size.
In the first two years of receiving the citizen’s allowance, the actual costs of the apartment should be recognized, even if it is larger and more expensive and is above the level classified as “appropriate”. This eliminates the pressure to quickly find a smaller apartment. In addition, the Union considers the planned protective assets to be too high. Assets up to EUR 60,000 and up to EUR 30,000 for each additional person in the household should not be taken into account. Possibilities for reducing benefits are to be restricted with the law in the first six months, the so-called trust period, if, for example, reasonable work is not accepted. This reduces the incentive to take up work instead of claiming state aid.
Sticking point “trust time”
Federal Labor Minister Heil’s draft stipulates that job seekers agree on a cooperation plan with the job centers. At the beginning there is a six-month “trust period” during which those affected are only threatened with reduced benefits – if they miss an appointment at the job center several times. In this case, a ten percent reduction in benefits is possible. After the six months, there is also a risk of further benefit cuts in the event of so-called breaches of duty – for example if the person concerned does not take up a reasonable position. This entails a 20 percent reduction the first time. The second time it’s 30 percent. Deductions for accommodation costs are no longer permitted.
Cons: A six-month “period of trust” goes too far for the Union. Keyword: social hammock. The Union speaks of “wrong incentives”. The principle of promoting and demanding should not be undermined,” said the chairman of the workers’ group of the Union faction in the Bundestag, Axel Knoerig (CDU). And CSU boss Markus Söder called it “completely absurd” that despite the lack of workers “there is not even the possibility could motivate someone to take a job”.
Holger Schäfer from the institute of German industry, which is close to employers, also speaks of false signals. In his view, citizen’s income will become “almost a universal social benefit for six months, without anything being asked for in return.” Sanctions would have a well-documented positive effect on reintegration into the labor market.
Employer President Rainer Dulger warned: “The basic income threatens to split our society.” It cannot be that some of the people who go to work in the morning only have a little more money at their disposal than someone who does not go to work in the morning.
Per: Poverty researcher Christoph Butterwegge counters this criticism. The assumption that hardly anyone would want to work after the introduction of citizen income is typical downward social envy and contradicts reality. “Because almost a million Hartz IV recipients go to work even though they can’t live on their wages.” The Greens social politician Frank Bsirske emphasizes: “The fact is: It is always worthwhile to go to work instead of receiving citizen benefits. Sanctions will remain possible in the future.”
The Duisburg-based social scientist Gerhard Bäcker also contradicted the assertion that recipients of citizen’s income had higher incomes than employed persons with a low income from work: “Anyone who only focuses on the standard rates of basic security is arguing dubious.” For example, an employee who works for the statutory minimum wage of twelve euros – in contrast to recipients of citizen benefit – may also be entitled to housing benefit. If children are to be maintained, they receive child benefit and child supplement.
The social benefit is also not too high: “Anyone who believes that they can lead a ‘comfortable’ life with a standard requirement of 502 euros, which should be available for a single person from January 2023, should try it out for themselves,” said Baker to the Evangelical Press Service (epd).
VdK President Verena Bentele argues in a similar way: “If voices from the skilled trades, industry and politics are now being raised that the planned citizen’s income will make non-working more and more attractive, then I can only reply to them: We need higher wages in the low-wage sector. Recipients should not be played off against low-wage workers. The increase of 50 euros a month is just a long-overdue adjustment for inflation, which comes a year too late. Having to live on 502 euros a month with galloping inflation – that’s definitely not enough. The new citizen’s income must enable a decent life in these troubled times with rising energy and food prices.”
sticking point protective assets
In the first 24 months, benefits are to be granted if there are no “significant assets”. Here the limit of 60,000 euros applies to the actual beneficiary and 30,000 euros for each additional person in the benefit community. In a family of four, this would protect 150,000 euros in savings. The long-term protective assets are to be increased to 15,000 euros. In addition, it will then no longer be checked whether one’s own car or one’s own apartment is appropriate.
Cons: CDU General Secretary Mario Czaja criticized the amount of the protective assets as deeply anti-social towards families who worked and paid taxes and thus had to finance the citizen’s income. The Federal Court of Auditors also described the exemption limits as “disproportionately high”. The federal budget should therefore “not be burdened with the receipt of benefits from people who can be assumed to have sufficient ability to pay for themselves.”
The German Association of Cities believes it is “a wrong signal that wealth plays no role for two years when someone applies for citizenship benefits. This waiting period must be significantly reduced and should be a maximum of one year,” says Managing Director Helmut Dedy. Overall, however, “the citizen’s income is a good thing”.
Per: Those affected should “have a clear head to qualify and further educate themselves, to look for new work and should not have to struggle” with using up assets or moving out of the apartment they previously lived in, defended SPD General Secretary Kevin Kühnert in the Deutschlandfunk the plans. He also pointed out that the protective assets for Hartz IV recipients had already been increased to 60,000 euros by the grand coalition, i.e. by the Union itself, in the course of the corona pandemic.
According to VdK President Bentele, it makes sense that people “who can’t find work for a while” don’t have to use up all their money “for old-age provision or something similar”.
How does the traffic light government react?
For the leading SPD in particular, citizen income is about their prestige project, with which they can finally get rid of the Hartz IV system. The reactions to the Union threats are correspondingly outraged. There is talk of “blatant populism” and “shameless false statements”. But even the FDP, which initially had political stomachaches with the citizens’ income, now warns: It’s not the time “for party tactical maneuvers”. Delays and blockades have nothing to do with responsibility, said General Secretary Bijan Djir-Sarai.
The traffic light parties are open to talks – they have to. “If the federal states led by the Union want to clarify detailed questions about citizen income, we are ready to do so,” said SPD leader Saskia Esken. However, it is non-negotiable that the introduction of citizen’s income to overcome Hartz IV “is primarily about respect”. Beyond compensating for inflation, ways to sustainably overcome people’s plight must be opened up. Green leader Ricarda Lang made a similar statement. “You can talk about anything,” she said towards Union. However, she sees little room for maneuver when it comes to the issue of protected assets: the planned regulation in this area is “a central component of this basic income”.
What could a compromise look like?
It would be possible to share the law. After all, the Union also supports increasing the standard rates to compensate for inflation. This part could therefore come into force as planned on January 1st, 2023, as Union parliamentary group deputy Hermann Gröhe outlined in the “Rheinische Post”. “There are ways and means for this outside of the Citizens’ Income Act,” said the CDU politician.
Another possibility: more money. In mediation procedures, the federal states often ensure that they receive more money from the federal government for the implementation of the law in question. That could also be part of a compromise here. In a recent statement on the Citizens’ Income Act, the Federal Council had already asked the traffic light government to review the costs and compensate for additional costs for municipalities and states.
What’s next?
In the Bundestag, the passing of the Citizens’ Income Act is currently on the agenda for next week, Thursday. After that, the Federal Council still has to decide. If the law does not get a majority there, the Mediation Committee of the Bundestag and Bundesrat would have a say. A compromise negotiated there would then have to be decided again by the Bundestag and Bundesrat. It is very questionable whether the citizens’ income can really start on January 1st.
Federal Chancellor Olaf Scholz does not want to dwell on such pessimism: he is very confident that the legislative project will be completed before the turn of the year. “The confidence is great.”