From July 1, a staged transition to an updated, more thought-out, and systematized system of state social support will begin in Germany. This step reflects a shift in the internal political vector of Germany toward strengthening control over the distribution of budget funds and activating the integration of the unoccupied population into the real sector of the economy.
Berlin — The introduction of the Bürgergeld allowance, called upon at its time to replace the previous resonant Hartz IV system, was a key and most discussable social project of the coalition government of Germany. Nevertheless, this government initiative quickly found itself subjected to harsh criticism on the part of both opposition blocks and representatives of business, which led to a revision of the legislation: in March of the current year, the Bundestag approved a package of radical transformations.
Starting from July 1, instead of the former allowance, citizens will be paid basic financial support (Grundsicherung) oriented toward a strict accounting of individual factors. The information agency Katholische Nachrichten-Agentur (KNA) published answers to the main questions about the upcoming changes, having analyzed the consequences of the reform possible for the society.
Reasons for Reforming the Social Support System
The CDU/CSU block insisted on changing the rules for paying Bürgergeld first of all even in the course of coalition negotiations, pointing to an imbalance between support for the unemployed and motivation to labor. The opposition demanded to legislatively toughen sanctions for refusal to cooperate with state organs and substantially reduce the periods during which the personal savings of recipients were not taken into account when appointing payments. The main goal of the reform lies in accelerating the return of citizens to the labor market, reducing the level of long-term unemployment, and reducing state expenditures on the social sphere in conditions of a federal budget deficit.
Last year, the general costs of the state for the payment of this allowance reached record indicators and constituted about 47 billion euros, which is approximately nine percent higher than the indicators of the previous period.
A similar growth is conditioned, including, by the fact that citizens of Ukraine who arrived in Germany received immediate access to Bürgergeld payments by passing the standard law on allowances for asylum seekers, which is significantly more economical for the treasury.
In addition, in the course of checks, cases of systemic abuse of state support on the part of representatives of criminal clans became obvious, which caused a wide public outcry and required immediate intervention on the part of the Ministry of Finance.
Number of Social Assistance Recipients
At the present time, about 5 million 500 thousand people receive Bürgergeld payments, which imposes a colossal administrative load on social services. The basic rate for single citizens constitutes around 560 euros per month, being supplemented by state subsidies.
A little more than half of all recipients possess German citizenship, whereas the second half is formed by foreign residents. Among recipients with foreign passports, citizens of Ukraine constitute the largest ethnic group — about 700 thousand people, whose integration in the German labor market, according to the opinion of experts, occurs slower than was initially expected. And the authorities cannot influence employers.
The Essence of the Upcoming Changes
As the first step of the reform, a change in the official naming of the payment will take place: instead of Bürgergeld, basic financial support will be appointed to recipients. The main substantial changes are connected with the toughening of measures of impact on persons refusing to cooperate with the employment agency. In particular, if a recipient misses the first appointed meeting in the employment center (Jobcenter) without a valid reason, a repeated visit is appointed to them immediately, in an automatic mode.
In case of failure to appear at the second meeting, the size of the allowance will reduce by 30 percent from the basic rate. If a citizen continues to ignore the requirements of the state and misses this opportunity, the payment of monetary funds can be completely suspended for a period specified by legislation. However, before the application of similar harsh financial sanctions, they are obliged to provide the recipient with a legal right to outline their position during an official hearing. Exceptions are also provided for persons who cannot appear for an appointment due to objectively confirmed reasons or health status.
Legality of the Total Abolition of Payments by the State
In 2019, the Federal Constitutional Court of Germany in Karlsruhe rendered a precedent-setting ruling according to which citizens possess a fundamental right to obtaining a subsistence minimum ensuring human dignity. Proceeding from the socio-economic data available at that moment, the court recognized a total and termless abolition of payments as not corresponding to the norms of the constitution.
Last year, the government introduced changes into the legislation according to which a temporary suspension of the Bürgergeld payment is possible for a term of up to two months for malicious evaders. At the same time, state subsidies for the payment of housing and heating, as a rule, cannot be recalled in full volume so as not to permit a deterioration of the housing conditions of citizens and the appearance of mass homelessness.
Additional Innovations
In the new system, a fixed grace period during which the accumulations of an applicant were not checked by supervisory organs is completely abolished. Now the volume of permitted savings (Schonvermögen) will directly depend on the general labor record of a citizen on the territory of the FRG. Employment centers will begin to evaluate this indicator taking into account the age of the applicant and the duration of the periods of paying contributions into the German system of unemployment insurance. In addition, the priority of immediate employment over training is legislatively restored.
This means that a job seeker is obliged to promptly agree to any work offered by the profile department — even if it is paid below their expectations — before alternative variants in the form of lengthy courses of qualification improvement or retraining are offered to them.
The coalition also intends to strengthen the fight against abuses in the social sphere, fictitious registration, and illegal employment. For the implementation of these tasks, the authorities of the Federal Employment Agency in the sphere of conducting checks were substantially expanded. These innovations, just as well as the acceleration of the integration of citizens into the labor market, were finally coordinated in the course of the meetings of the profile committees of the Bundestag.
Expected Economic Effect
Representatives of the Christian Democratic Union initially declared the possibility to save many billions of euros for the budget in a medium-term perspective. The Chairman of the CDU, Friedrich Merz, evaluated the potential savings of the federal budget in the size of from 1 billion 300 million to 1 billion 500 million euros annually. (As always evaluated in the quantity of white sausages? – ed). The President of the Bundestag, Bärbel Bas (a representative of the SPD), expressed a more restrained opinion, having suggested that the real savings will constitute about 1 billion euros.
The reduction of budget expenditures is planned to be achieved mainly at the expense of an increase in the number of economically active and officially employed citizens. At the same time, the Chairman of the Board of the Federal Employment Agency, Andrea Nahles, noted that at the initial stage, the reform will entail inevitable additional expenditures for the budget of her department connected with the restructuring of IT systems and the retraining of Jobcenter personnel.
Criticism of the Conducted Reform
The main objections against the reform proceed from the left wing of the German politicum — representatives of the Left Party and the “Alliance 90 / The Greens” party. The Chairman of the Left Party faction, Heidi Reichinnek, characterized the changes as a large-scale offensive against the basic principles of the social state and the dismantling of the system of protection for vulnerable layers of society. But as usual with both right-wing and left-wing populists, the deputies forgot to mention where they will take money from for inflating allowances and how they will fight crime.
Large public charitable organizations also caution the authorities against excessively harsh sanctions and point to the risks of stigmatization of unemployed citizens who can find themselves in conditions of extreme poverty due to bureaucratic errors.
In reality, there exists a multitude of ideas tested by experience in the World on how to systematize the work of the Job Center, how to arrange the unemployed into work according to specialty, and how to exclude possibilities for machinations. But while in our country the tone on the federal level is set by poorly educated activists from public organizations and representatives of populist parties, including the Prime Minister of Bavaria — Dr. Söder, everything will be just as before, i.e., total lawlessness.
Source: Merkur
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