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Citizens’ allowance reform: Bonuses and bonuses for further training
The second stage of the citizen income reform came into force at the beginning of the month. photo
© Patrick Pleul/dpa-Zentralbild/dpa
At the beginning of the year, “Hartz IV” was officially replaced by “Bürgergeld”. But it’s about more than just a name change and more money. With stage two of the reform, further training bonuses and premiums beckon.
In January, the first reform step was implemented with an increase in the standard rates by 53 to 502 euros for single people without children. The term “citizen’s allowance” should also replace the negatively connoted term “Hartz IV”, which had prevailed for basic security. The new regulations of the second reform step at a glance:
“Further training allowance” and “citizen’s allowance bonus”
70 percent of the 1.7 million unemployed in the basic security have no formal professional qualifications. If those affected opt for further training that leads to a professional qualification, a so-called further training allowance of 150 euros per month is now paid for this in addition to the basic income. For passed and proven intermediate and final examinations, there should also continue to be further training bonuses of up to 1500 euros – without the reform this regulation would have expired. Anyone who takes part in short-term further training courses that do not lead to a professional qualification can receive a “citizen’s allowance bonus” of 75 euros per month.
Cooperation plan instead of integration agreement
The citizen income reform is also intended to raise the relationship between those who receive benefits and the clerks responsible for them to a new level. The Federal Employment Agency speaks of “partnership and binding cooperation”. In the future, the next steps and goals up to integration into the labor market are to be recorded together in a clear “cooperation plan” in simple language. This is intended to replace the previously customary multi-page “integration agreement”, which many people probably find rather incomprehensible, and which lists the rights and obligations of both sides in official German.
Higher Allowances
In order to increase incentives for taking up work, allowances are to be increased. If recipients of citizen’s income earn additional money, this income is offset against the citizen’s income. So far, 20 percent of this has been exempt from deductions for an income of 520 to 1000 euros, in the future it should be 30 percent. “That means up to 48 euros more in the wallet than before,” says the Federal Ministry of Labor. Income from a student job, vocational training or voluntary service should no longer be counted towards the citizen’s income up to 520 euros.
What else has changed with the change to citizen’s income
In addition to the increase in the standard rates, other citizen income rules have also been in force since January, for example, so-called placement priority no longer applies, i.e. the requirement that those affected be placed in work quickly. Instead of short-term help jobs, it should be more about further training and long-term job opportunities. In addition, since the beginning of the year there has been a so-called waiting period in the first year of receiving citizen benefit: those affected do not have to look for a smaller apartment or tap into their savings.
Criticism of Reform
There had been repeated criticism, especially from the Union, before the citizen income reform came into force. Representatives of the CDU and CSU had emphasized that this was a departure from the principle of “support and challenge”. The accusation was also raised that recipients of citizenship income may be better off than people who work.
The Paritätischer Wohlfahrtsverband, on the other hand, complained that even after the increase at the turn of the year, the standard rates “in no way cover needs”. In addition, managing director Ulrich Schneider told the editorial network Germany (RND/Saturday) that “a misanthropic sanctions regime” would remain. However, he welcomed the new exemption limits and the training allowance that are now in force.
AfD faction deputy Norbert Kleinwächter, on the other hand, criticized the further training money as completely wrong incentives. “Employees who often acquire further qualifications at their own expense in their free time are thus far worse off than recipients of basic income,” he said in Berlin. These qualified at taxpayer expense, received an additional bonus and would also have their rent and energy costs paid.
5.5 million people receive citizen benefits
According to the Federal Employment Agency, almost 5.5 million people in Germany received citizenship benefits in May. That is about every 15th inhabitant. In addition to around 1.7 million unemployed, this also includes children in so-called communities of need or top-ups who earn very little and are also dependent on citizen income.