As of: January 26, 2024, 10:32 a.m
By: Amy Walker
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Chancellor Olaf Scholz is not exactly known for publicly explaining his policies.
In a new interview, he takes a stand on many topics - including citizens' money.
Berlin - A year has passed since the new citizens' money was launched and replaced Hartz IV.
This means that unemployed people receive more money and are penalized less.
In addition, people who work but earn little money also have the opportunity to top up their income with citizen's money.
Merz would like to abolish citizens’ money: “Wrong in principle”
Since then, there has been a lot of public debate about whether the new citizens' benefit has reduced incentives to work.
Studies have repeatedly shown that this is not the case;
But CDU leader Friedrich Merz is still in favor of abolishing citizens' money.
The concept of citizens' money is "fundamentally wrong," said Merz this week in Berlin, because it could give the impression: "You can achieve prosperity in this country without work and without effort.
No, we can’t do that.”
Merz emphasized at the economic congress: “We will also have to tell our population that if we want to maintain this prosperity, then we will have to work more for it and not less.” He believes that this will be met with approval, especially among employees.
So far, the highest government representative, Chancellor Olaf Scholz (SPD), has had little involvement in the citizens' money debate.
But that's over now: in a big interview with Die
Zeit
said Scholz: “Overall, the citizen’s benefit reform is well balanced.” He is “explicitly not” of the opinion that the citizen’s benefit has reduced the incentive to work.
Chancellor Olaf Scholz (SPD) on January 24th at a federal government cabinet meeting in Berlin.
© IMAGO/Christian Spicker
The Ifo Institute also recently came to this conclusion and contradicts the widespread assessment that work in Germany is no longer worthwhile because of citizens' money.
“In Germany, work always leads to higher incomes than doing nothing,” explained the Munich Economic Research Institute at the beginning of the year.
According to the scientists' calculations, the prerequisite is that low-income earners also apply for the possibility of topping up their income through additional social benefits.
Without money from the state, the pure income from work may actually be lower than the citizen's benefit.
“The claim made by some politicians that those who only receive social benefits receive more net than a low earner is simply wrong,” said Andreas Peichl, head of the Ifo Center for Macroeconomics and Surveys.
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Olaf Scholz: “It is a moral duty to work”
During this time
, the Chancellor was also asked
about the new sanctions for citizens' benefit recipients who refuse to take up work.
“With the sanctions that have now been agreed, I hope that we will increase support for the reform.
In any case, the old law before the citizens’ money reform was significantly worse,” said Scholz.
The Chancellor emphasized that there is “a moral duty” to work.
“Our society is built on work, on respect for work and those who do it.” Nevertheless, we need to help those who become unemployed so that they are able to find new work.
The tightening of sanctions is part of a savings package for the 2024 budget. The planned regulation on citizens' money is expected to bring savings of around 170 million euros per year - 150 million for the federal government and 20 million for the municipalities.
Accommodation and heating costs should not be eliminated.
So far, the sanction options for citizens' money have been comparatively moderate: 10 percent for missed appointments, up to 30 percent for failure to apply or take courses in violation of the agreement.
The measures are limited to two years.
Citizens' money sanctions should be examined after two years
Whether the possibility of complete sanctions should remain permanent after two years will then be decided on the basis of a review.
The Federal Ministry of Labor should coordinate with the Federal Employment Agency and its research institute for labor market and career research on how this can be included in the ongoing evaluation of citizens' benefit.
The Greens in the Bundestag, who had heavily criticized the tightening, claimed to have enforced the time limit.
“We have ensured that the regulation will automatically disappear from the law,” said parliamentary group deputy Andreas Audretsch to the German Press Agency.
Until then, the application and effect would have to be intensively monitored and checked.
With material from dpa