Social reform launched

The German government is planning to introduce a new job-seeker’s allowance that is intended to replace the current system.

Hubertus Heil
picture alliance/dpa

The German government has launched a key reform of its social welfare system. On Wednesday, the Federal Cabinet approved a bill by Labour Minister Hubertus Heil that would see a new job-seeker’s allowance introduced in Germany. Now that the cabinet has given its approval, the consultations in parliament can begin.

The allowance, known as Bürgergeld (literally citizen’s money), is to replace the current system, which is associated in Germany with the term Hartz IV, on 1 January 2023. The standard rates of the basic income support are to increase significantly. Single people will receive 502 euros a month and young people 420 euros. Today, single people receive 449 euros.

In addition, job-seekers are to be subjected to less pressure by the job centres in future. The principle of giving priority to job placement is to be abolished. Instead, further education is to be strengthened. The costs of housing are to be covered in full for the first two years. Savings of up to 60,000 euros will also be allowed to be kept during this period. In addition, no sanctions are to be imposed in the first six months, for example if a job offer is rejected.