For households with minimum wage, work would pay less

Berlin The planned introduction of citizen income could break a central promise of the traffic light. Even after the introduction of the Hartz IV follow-up benefit, employees should be financially better off than recipients of social benefits. Minister of Labor Hubertus Heil (SPD) promised: “We have to make sure that work pays off,” he told Deutschlandfunk.

But calculations by the Kiel Institute for the World Economy (IfW) show that this principle is in question when it comes to the planned citizens’ income. The researchers Ulrich Schmidt and Denis Haak use different case constellations to show how future recipients of the social benefit and their families are compared to households with a sole breadwinner who receives the minimum wage of twelve euros in his 40-hour job.

In addition to the standard rate, which will be raised from the current EUR 449 to EUR 502 for singles, recipients of citizen’s income are also entitled to reimbursement of the gross rent and heating costs. In the case of employee households, entitlements to child benefit or housing benefit are taken into account in addition to earned income.

New citizens’ allowance: wage gap requirement would be violated