The citizen’s income (Bürgergeld) will be introduced in Germany in January. The Bundesrat, the upper house of the federal parliament, approved the social reform legislation on 25 November after the lower house, the Bundestag, had earlier passed it.
The Bürgergeld, which will replace the basic income support for job-seekers (Hartz IV) that was introduced in 2005, is a basic allowance for job-seekers. It is to ensure that they can meet the basic necessities of life.
On 1 January, the basic income support will increase by more than 50 euros per month for single adults. The major parts of the reform, a central project of the coalition government of the Social Democrats, Greens and Free Democrats, will however come into force on 1 July.
The new law provides that the unemployed are to be put under less pressure with the threat of withdrawal of benefits and instead they should receive more support to undertake further qualification training. Moreover, the regulations on the permissible value of assets and the size of flats of benefit recipients are to be relaxed.
Here are the highlights of the Bürgergeld:
■ On 1 January, the basic income support will increase by more than 50 euros compared to the current Hartz IV rate. Single persons will receive 502 euros a month. Currently, single persons receive 449 euros. Couples are to receive 451 euros (previously 404 euros), children aged 14 to 17, 420 euros (previously 376 euros). For six- to 13-year-olds, the rate will rise to 348 euros (previously 311 euros) and for infants up to five years to 318 euros (previously 285 euros).
■ Housing: Recipients of the citizen’s allowance can keep their current flat in the first year even if it is actually too big. Reasonable heating costs are covered. According to the law, the Jobcenters do not have to check whether a flat is adequate in the first year.
■ As from 1 January, there are to be fewer sanctions in the new system. A benefit reduction of ten per cent for one month for the first breach of the obligation to cooperate, 20 per cent for two months for the second time and 30 per cent for three months for the third time. Housing costs must still be paid.
■ Jobseekers are to be subjected to less pressure by the Jobcenters. The principle of giving priority to job placement will no longer apply. Instead, further training is to be strengthened. In future, people on benefits will no longer have to accept every job offer if training or further education promises better opportunities. There is a monthly further training allowance of 150 euros and bonuses for qualifications. Vocational training will be funded for up to three years. Previously, the limit was two years.
■ Benefit recipients are to be allowed to keep more of their additional earnings than before. Specifically, they will be allowed to keep 30 per cent (instead of the previous 20 per cent) of earnings between 520 and 1,000 euros.
■ Benefit recipients will in future be allowed to keep their savings. This so-called “Schonvermögen” amounts to 40,000 euros during the first year. Other persons in a so-called ‘household of need’ may keep 15,000 euros each. Old-age provisions and housing property will remain largely untouched for the time being.
■ Students and pupils whose families receive benefits will be allowed to keep the full amount of their income from mini-jobs, instead of less than 200 euros so far. This corresponds to up to 520 euros per month. Trainees will keep more than 600 euros of their training allowance in future. Those who have an volunteering position will keep more of their expense allowance.
Those who were previously entitled to unemployment benefit II or social benefit will continue to be entitled to the Bürgergeld in the future. Accordingly, no new applications need to be submitted.
The law enabling Bürgergeld is one of the most important social policy projects of the governing coalition and it affects almost five million benefit recipients and 405 Jobcenters with almost 75,000 employees.