Farewell to Hartz IV: inflation eats up citizen money

More training, fewer sanctions: in 2023, the citizen's allowance should replace Hartz IV. The standard rate increases by 50 euros - too little, say social associations.

When Minister of Labor Heil (left) tells you that you get 53 euros more – with 7.9 percent inflation Photo: Annette Riedl/dpa

BERLIN taz | On Wednesday morning, Federal Labor Minister Hubertus Heil (SPD) was put on the defensive in the “ZDF morning magazine”. He should declare himself the new citizen money. The moderator confronts him with the statement of a long-time Hartz IV recipient who has little from the planned increase of 50 euros in view of inflation and rising electricity costs.

Heil stays calm and nods. "I know that the new citizen's income is also a basic security that secures a subsistence level - no more, but also no less," he replies. Then he leads on to all the improvements that the new citizens' allowance is supposed to bring: Less bureaucracy, more training, more cooperation, fewer sanctions. "The spirit of the new system" is that of "encouragement and empowerment," explains Heil.

On Wednesday, the federal cabinet decided to introduce the new citizens' allowance. Heil's draft law is now being discussed in the Bundestag. The current Hartz IV system is to be replaced on January 1, 2023.

For the Social Democrats, the basic income reform is also a bit of a way of dealing with political trauma, the final farewell to Hartz IV. Because the reform is intended to introduce a new approach: Less harshness and sanctions, but more training opportunities and more money.

SPD praises itself for 53 euros more

"The new citizens' income offers security and opens up opportunities," tweeted Federal Chancellor Olaf Scholz (SPD) on Wednesday. It is based on the upcoming inflation rate and is less bureaucratic. "On January 1st we will leave Hartz IV behind us," wrote the chancellor. Also Labor Minister Hubertus Heil praised himself: "With the citizen money we strengthen the welfare state and bring people permanently out of unemployment."

Specifically, the draft law from the Ministry of Labor provides for the following: The amount of the rates will increase. From 2023, the standard rate for single adults will increase from around 449 euros to 502 euros – that’s 53 euros more. In addition, inflation is to be taken into account more quickly in future when the standard rates are adjusted annually. So far, inflation has only been taken into account with a very long delay and can hardly compensate for actual additional burdens.

But the basic calculation of the subsistence level remains unchanged: the standard rates are based on the average expenditure of those with the lowest incomes – expenditure on “non-essential goods”, such as cigarettes or houseplants, is also subtracted. This method of small calculations has been criticized for years.

A major innovation in citizen income, however, is the abolition of the so-called placement priority, which values ​​taking up work more highly than further training. In practice, this often means that people are pushed into badly paid temporary jobs instead of being given the opportunity to gain further qualifications. Now a paradigm shift is to take place: the citizen's allowance provides for a monthly further education allowance of 150 euros.

In addition, many things should become less bureaucratic and forgiving. Citizens’ income recipients should be able to stay in their apartment for the first two years, even if it’s actually too big. During this time, savings of up to 60,000 euros can be kept, for each additional person in the household 30,000 euros more. This regulation was already introduced during the corona pandemic and is now being made permanent. But even after these two years, recipients of citizen income may own more "protected assets" than before. In addition, the additional income limits are to be increased.

sanctions remain

However, what stirs tempers the most is the issue of sanctions. Although these will not be abolished under the draft law, they will be significantly reduced. In the first six months of receiving citizenship benefit – the draft says “time of trust” – there should be no sanctions, except for missing a deadline. The citizen's income can then be reduced again by up to 30 percent. Tougher sanctions for under-25s, on the other hand, will be abolished. Only recently was one Study by the Institute for Social and Economic Research (INES) presented, which came to the conclusion that sanctions do not create work in the long term, but can intimidate and make you ill.

While social organizations criticize the sanctions and, above all, standard rates that are too low, the President of the Craft Industry, Hans Peter Wollseifer, rumbled that the reform would reduce the incentive to work. The Union also criticized false incentives - it is the usual reflex to play off low earners and the unemployed against each other. “The basic income ensures that non-work becomes much more attractive. This is disrespectful towards the unemployed and the taxpayers who finance the solidarity system with their contributions," complained the labor market policy spokesman for the CDU/CSU parliamentary group, Stephan Stracke. This is moving "in the direction of an unconditional basic income."

Verena Bentele, President of the social association VdK Germany, countered the criticism. The problem is not increased standard rates, but the low pay in the low-wage sector: "This is a clear request to those who pay low wages that they pay better." One cannot say, "the Hartz IV standard rate is now too high and the low-wage workers no longer have any distance.”

Greens and FDP were satisfied. "Right now, in a crisis, the signal is clear: We won't leave people who have little alone," said Britta Haßelmann, leader of the Greens parliamentary group. Jens Teutrine, spokesman for citizens' allowances for the FDP parliamentary group, also welcomed the reform project. The citizen's income creates "more fairness and performance justice". The goal is a welfare state that “creates opportunities to free oneself from dependence on social benefits.”

The socio-political spokeswoman for the left-wing faction, Jessica Tatti, drew a mixed conclusion: "There are ups and downs in the draft law, but the most important thing is missing: an honest assessment and increase in the standard rates." She cannot see a departure from Hartz IV in this. Tatti criticized "the lousy small calculator" and called for "an honestly calculated standard rate of 687 euros."

The AfD demonstrated once again that they are not on the side of the poorer sections of the population, contrary to what they recently claimed in the course of the energy crisis: "The basic income takes away the willingness of the working population to perform," asserted parliamentary group deputy Norbert Kleinwächter, mixing his social Darwinist opinion still with racist resentments: The country is being made “a vanishing point for economic migrants”, according to Kleinwächter.

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