German job seekers face reduction, loss of unemployment benefits under proposed tougher rules
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Under proposed rules, Germany’s job seekers refusing reasonable employment that could end their need for state support can lose government payments for up to two months.
PHOTO: BLOOMBERG
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BERLIN – Germany’s conservative-led government agreed on Dec 17 to overhaul unemployment benefits so job seekers who break rules face tougher penalties, a hotly disputed reform that fuelled tensions in the ruling coalition.
The “citizens’ income” benefit was a key policy of the previous, centre left-led government but critics on the right argued it was too generous and did not do enough to encourage the unemployed to find work.
After weeks of rancorous debate, Chancellor Friedrich Merz’s coalition, led by his centre-right Christian Democratic Union (CDU) party, signed off on abolishing the former benefit system and replacing it.
It was sensitive for Germany’s centre-left Social Democratic Party or SPD as the party – CDU’s junior coalition partners – had to do a U-turn on a major piece of legislation they had introduced, and it provoked protests from their youth wing.
The draft Bill from the office of SPD’s Labour Minister Baerbel Bas insisted, however, the changes would “rebalance the relationship between support and participation, between solidarity and personal responsibility”.
Mr Merz said the overhaul would ensure that “our welfare state remains viable for the future”.
Central to the reform is introducing tougher penalties to encourage job seekers back into work.
Those who refuse reasonable employment that could end their need for state support can lose government payments for up to two months.
Other violations, such as failing to submit job applications or dropping out of training courses, could see their monthly payments reduced by 30 per cent for three months.
Repeatedly missing appointments at the job centre can result in a complete loss of benefits.
Germany’s unemployment rate has been ticking up as the economy struggles through a long downturn, with traditional manufacturers in particular shedding jobs as international competition intensifies.
Ms Bas said on Dec 17 that the goal of the reform was “to get people into permanent employment” but she also stressed that those who need help will still be able to “rely on the support of the state” in the future.
The changes still have to be voted through Parliament.
More than five million people a month claimed “citizens’ income” in recent times, which is €563 ($850) for a single person. It costs the government about €50 billion a year. AFP
