The much-discussed and frequently criticized unemployment benefit II, also known as Hartz IV, will be replaced on January 1, 2023, by the so-called citizen benefit.
 |
| Berlin, Germany |
It is the most significant social reform in decades: The federal government intends to replace the contentious Hartz IV system with citizen income beginning in 2023. Citizens' income first failed in the Bundesrat, but subsequently traffic lights and the Union agreed on a compromise. The Bundestag and Bundesrat have now made their decision. What will the citizen money resemble?
For a long time, it was uncertain if the citizens' income would be able to replace the Hartz IV system by the end of the year as anticipated. The draft bill was first defeated in the Bundesrat, but Union and Ampel reached an agreement in the mediation committee. This was now decided on Friday (November 25) by the Bundestag and Bundesrat. This opens the door for citizen income.
The prior benefits are to be enhanced by the citizen's income, and the trust between benefit beneficiaries and work centers is to be strengthened, according to the present draft. It is referred to as "eye level" by Federal Labor Minister Hubertus Heil. However, problematic punishments will remain: for example, payouts may be cut if deadlines are not fulfilled. Reductions of 10% to 30% are feasible.
Anyone who was previously eligible for unemployment benefit II will be eligible for citizen benefit in the future. No additional applications need to be submitted for this. Citizens' income is also a possibility for persons whose income from employment is not adequate to pay their living expenditures. You can receive extra assistance.
The regular cost for single individuals will be hiked from EUR 449 to EUR 502 on January 1st, representing a EUR 53 monthly increase. The sum increases to 402 euros for people under the age of 25 who still reside with their parents. For children from six to 14 years at 348 euros. For children under the age of six it is 318 euros.
The draft law requires job searchers to agree on a strategy of collaboration with employment centers. The initially intended six-month "trust period," during which people impacted would only face lower benefit cutbacks if they missed a job center visit many times, has now been canceled.
As a result, there is still a danger of benefit reduction in the case of so-called breaches of duty, such as failing to take up a decent post. This results in a 20% decrease the first time. The second time, it's 30%.
Deductions for lodging costs are no longer authorized.
So far, a jobless person's occupational training has frequently failed because he is largely required to accept a temporary work. This "priority" will no longer be in effect in the future. Instead, a monthly higher education stipend of 150 euros would be implemented to encourage vocational training.
Furthermore, benefit beneficiaries will be allowed to attend retraining as part of subsidized professional development in three years, rather than the prior two years, if necessary.
According to the updated draft, job centers do not determine if an apartment is suitable for the first year. People who are unemployed and looking for work should not have to worry about their housing, according to Federal Labor Minister Hubertus Heil, who explained the concept.
If there is no "substantial wealth" in the first 24 months, benefits are provided. The real benefit recipient is now limited to 40,000 euros, with an extra 15,000 euros for each new member in the benefit community.
An additional income of up to 100 euros is not included in the citizen's income. If it exceeds that threshold, a specific percentage will be calculated as normal. What's new is that people earning between 520 and 1,000 euros will be allowed to keep more of their earnings in the future. For example, top-ups with earnings between 520 and 1,000 euros are able to keep 30 percent of their revenue without being offset. It was still 20% with Hartz IV.
Source: MDR.DE