Berlin The new citizens’ allowance, with which the federal government wants to replace the existing Hartz IV system, should start punctually at the beginning of next year. Minister of Labor Hubertus Heil (SPD) announced on Wednesday in Berlin that he would submit his draft law to the interdepartmental vote in the next few days.
However, there is still no agreement within the coalition on controversial issues such as the amount or the calculation method for future standard rates. A fundamental reform of the additional income rules for recipients of basic security is also being postponed for the time being.
The situation is different today than it was 20 years ago, when the agenda reforms were launched, Heil justified the plans. Instead of mass unemployment, there is a shortage of skilled workers. And even during the corona crisis, the basics of a reform were tried out that had proven themselves.
This applies to the two-year waiting period introduced during the pandemic, during which recipients of basic security do not have to worry about their savings or their apartment. In the future, this should also apply to the first two years of citizenship allowance.
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Assets of up to EUR 60,000 remain untouched for persons entitled to benefits, and EUR 15,000 for each additional person living in the household. Citizens’ income recipients should also be able to put more money aside for old-age provision and, as a rule, be allowed to stay in their own property they use themselves.
Heil: “It’s about a state of the art welfare state”
Reform will cost 500 million euros in the coming year
Practitioners in employment administration in particular had pushed for a core element of the reform – the abolition of priority placement. Instead of placing benefit recipients in the next best temporary job, the job centers can now also place them in an apprenticeship or in up to three years of professional qualification-related further training. Because two out of three long-term unemployed have not completed vocational training.
Beneficiaries and job center employees should meet more “at eye level” in the future.
(Photo: dpa)
Heil said: “One principle is to dare more encouragement.” In future, anyone who takes part in further training will receive 150 euros a month in addition to the standard rate, and the traffic light government wants to extend the existing bonuses for successful professional qualifications.
Recipients of unemployment benefit I who take part in further training retain their entitlement to benefits for three months after completion, so they do not immediately slip into basic security if they cannot find a job.
The traffic light wants to continue the so-called social labor market, which expires at the end of 2024 according to current law. Among other things, it provides wage cost subsidies for employers who give the long-term unemployed a chance. According to Heil, since the start of the program in 2019, more than 50,000 long-term unemployed have been placed in employment subject to social security contributions.
>> Read here: Almost three out of ten unemployed people are placed in temporary work
According to Heil, the reform will cost 500 million euros next year. However, a possible increase in the standard rates has not yet been received. Heil has stated in interviews that he considers an increase in the Hartz IV rates – currently 449 euros a month for single people – by 40 to 50 euros a month to be justified.
This figure is reached when the income of the bottom 20 percent of households is no longer used as the basis for calculating the amount of benefit, as is currently the case, but that of the bottom 30 percent.
The current calculation method for the Hartz IV rates also shows the high price increases with a time lag and incompletely, Heil said on Wednesday: “The previous system lags behind the current inflation trend.”
Criticism from the FDP
However, the FDP does not want to know anything about higher standard rates because there is no mention of it in the coalition agreement: “Instead of having a debate about calculation methods, although the standard rates of basic security are adjusted at the beginning of the year anyway, the goal must be sustainable integration into the labor market be pushed more strongly,” demanded Jens Teutrine, the member of the Bundestag responsible for citizen income at the FDP.
This also includes finally adjusting the additional income regulations for adult beneficiaries. According to current law, recipients of basic security above a tax-free limit of 100 euros per month may keep a maximum of 20 cents from each additional euro earned.
In the coalition agreement, however, the SPD, Greens and FDP had agreed to have a fundamental reform model for the rules on additional earnings developed by an independent commission made up of several research institutes. Heil therefore initially only wants to increase the allowances for income from school and student jobs and for trainees to 520 euros, which the FDP had demanded.
There had also been a dispute within the coalition in the run-up to the issue of sanctions. The SPD and the Greens pushed through a “moratorium on sanctions” against the opposition of the liberals.
Read more about Hartz IV sanctions here:
Although the Federal Constitutional Court declared benefit cuts of up to 30 percent lawful in its Hartz IV judgment of November 2019, violations of the rules will only be punished with a maximum of ten percent benefit withdrawal until the end of June 2022.
According to the coalition agreement, sanctions of up to 30 percent are to be introduced with the new citizens’ allowance – according to Heil’s plans, however, only after a six-month period of trust has expired, during which reductions in performance in the event of breaches of duty are largely ruled out. Appointments at the job center must also be made in the first six months, the minister emphasized. this is also possible “flexibly informally”.
The labor market and social policy spokesman for the FDP parliamentary group, Pascal Kober, welcomed the fact that Heil also showed signs of making the system less bureaucratic. It should be possible to submit applications digitally in the future.
Job centers should also not have to reclaim overpaid benefits up to a limit of 50 euros: “There should be no lack of ambition when it comes to reducing bureaucracy, because it eats up too much time and money that would be better invested in training the long-term unemployed,” said Kober.
On the other hand, the chairman of the Union faction in the Bundestag Committee for Labor and Social Affairs, Marc Biadacz, considers it “unrealistic” that citizen income should be introduced as early as January next year. “The traffic light federal government has not even agreed between the SPD, Greens and FDP on what such a citizen’s income could look like,” he said.
The Union is particularly critical of Heil’s plan to largely abolish the obligation to cooperate: “The citizen’s income must not become an unconditional basic income through the back door,” Biadacz demands.
More: The Chief Economist – The Hartz IV benefits are becoming an almost unconditional basic income