Social reform: Disputes about citizens' income up to the last minute

Because of the dispute over the planned citizens' income, by far the highest increase in standard rates since the introduction of Hartz IV in 2005 is on the brink.

Social reform: Disputes about citizens' income up to the last minute

Because of the dispute over the planned citizens' income, by far the highest increase in standard rates since the introduction of Hartz IV in 2005 is on the brink.

The German press agency learned from several sides that there was still no agreement in the confidential negotiations between traffic lights and the Union. More than 5.3 million people who receive unemployment benefit II or social benefits are affected. The income of single people is to increase by more than 50 euros to 502 euros as of January 1st. The traffic light rejects an exclusive increase in rates without the actual reform proposed by the Union.

According to the Federal Employment Agency, an agreement is needed by the end of this month so that the higher rates can then be technically implemented. The mediation committee of the Bundestag and Bundesrat is to seal a solution this Wednesday evening after the draft submitted by Labor Minister Hubertus Heil (SPD) initially fell through in the state chamber. What are the points of contention, possibilities for agreement and goals of the reform?

Sanctions - the starting position

CDU leader Friedrich Merz, himself a member of the mediation committee, said on Saturday at the Junge Union about citizen income: "This must also be accompanied by sanctions." According to the draft law, there should be no reduction in benefits in the first six months if someone fails to take part in measures agreed with the job center or fails to apply for placement suggestions. Reductions in performance in around 63,000 cases a year should thus become unnecessary. On the other hand, sanctions of up to 10 percent for multiple non-reporting to the job center should also be possible during this "time of trust". According to the FDP politician Johannes Vogel, 80 percent of the sanctions would still be possible.

As early as 2019, the Federal Constitutional Court set sanction limits: At that time, it still prohibited possible reductions in remuneration of 60 percent for the second breach of duty per year as unreasonable. 30 percent less were allowed. Merz admitted that the scope was "according to the welfare state requirement of the Basic Law" narrow. After six months, the traffic light provides for 20 percent less performance in the event of a breach of duty, and 30 percent for each additional time - unless this would lead to exceptional hardship. If someone credibly declares that they will comply with their obligations, the sanction should be waived. Accommodation and heating costs are not reduced according to the draft.

Sanctions - the unification corridor

The six-month "trust period" and the precise rules that apply could be up for discussion - and the amount below the 30 percent threshold and how to proceed later.

Saving assets - the starting position

The bill provides for a two-year transitional period for housing and assets. During this "waiting period" appropriate costs for rent and heating should be taken over. Savings should not have to be used up if they are not significant assets. 60,000 euros and 30,000 euros for each additional person in the so-called community of needs are considered significant. Self-used land or condominiums should not be taken into account. Not even money saved for old age. From the third year, larger living areas and more assets should also be exempted from ownership.

Saving assets - the unification corridor

Instead of 60,000 euros, those affected could be granted less money. This could also be made dependent on the duration of the deposit; younger beneficiaries could then be allowed to keep fewer. Changes are also conceivable in the other rules in detail.

Additional earnings - also a key point

Anyone who earns between 520 and 1000 euros should be able to keep more of their income in the future. The allowances in this area are to be raised to 30 percent. The allowances for pupils, students and trainees are to be increased to 520 euros.

The FDP politician Vogel explains: "Today, for example, Annika, who grows up in a Hartz IV family and works in a mini job, can only keep 184 euros of 520 euros. If Ayse, whose parents are financially independent, the same mini job then she can keep 520 euros." In the future, people should no longer have the experience "that their effort is not worthwhile". For the FDP, "even more performance-friendly additional earnings rules" are conceivable.

No criticism of the reform goal

The core goals of the reform are not under discussion: more integration into training or work and overcoming the need for help. The plan is for each benefit recipient to have a personal contact person. A cooperation plan is to be drawn up during the discussion. Those affected should be confronted far less with the possible legal consequences of not complying with agreements. There should be more further education, retraining, education, career orientation and activating programs for them. The priority on quick placement in work is to be abolished, as a result of which many end up in helper jobs. These reform components are not to take effect until July. The Federal Employment Agency then expects noticeably more work in the job centers.