"Incomplete in essential points": German Social Court criticizes planned citizen's income

Created: 09/27/2022, 08:48

By: Patricia Huber

Not everyone is enthusiastic about the new basic income.

The German Social Court Congress also has concerns in many areas.

Berlin – Hartz IV will end next year. From January 1, 2023, the citizen’s allowance will then replace unemployment benefit II.

The reform should change a lot for recipients.

The standard rate increases to over 500 euros and the requirements for job seekers are relaxed.

But not everyone is enthusiastic about the new basic income.

The Federal Employment Agency has already complained that the time until the changeover would be far too short to adapt all processes and IT systems.

Criticism of citizen income: Rising cost of living not taken into account

The German Social Court Congress (DSTG) has also expressed criticism in a statement.

On the one hand, the Ministry of Labor's draft law lacks an explanation of how rising living and energy costs are being addressed.

Especially in view of the currently extremely sharp rise in electricity and food prices, a situation-related adjustment of the cost assumption would be important here.

On the other hand, the DSGT also lacks a complete cost estimate.

The statement literally says: "Overall, we lack a complete and conclusive cost estimate that prospectively considers the cost increases in various scenarios." The draft law only mentions additional expenditure of around 650 million euros for the year 2023.

However, it has not been clarified whether this would still be sufficient given an increasing number of benefit recipients.

According to the DSGT, the looser basic income regulations – especially with regard to assets and accommodation – could lead to an increase in social assistance recipients.

Citizens' income could lead to "undesirable side effects".

The club is also skeptical about the planned asset regulations.

Because with the new basic income, the asset check is completely suspended in the first six months of receipt.

The DSGT sees the asset test "as the core of the principle of reciprocity of 'support and demand'." If this is omitted, the "undesirable side effects" could not be estimated.

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A similar argument is made in the statement on the abandonment of sanctions.

There is simply a lack of scientific data that should form the basis for the new regulation.

Otherwise, “consequential effects that cannot be fully foreseen” would again threaten.

In summary, the DSGT considers the new citizen's allowance to be "incomplete in essential points".

The association urgently calls for the acquisition and analysis of scientific data that deal with the effects of the changes.