Berlin.
Citizens’ income is introduced and replaces Hartz IV. We have summarized the main differences between the two services.
- At the turn of the year the time has come: Citizens’ income is introduced and replaces Hartz IV
- This changes a lot in terms of basic security
- But what exactly is the difference between the two services?
Unemployment benefit II – popularly known as Hartz IV – has been the subject of criticism ever since it was introduced in 2005. One of the arguments is that the money would simply not be enough to lead a decent life. The SPD in particular has been struggling with the basic security system it has introduced for a long time. Now this is being abolished: On January 1st, the traffic light government will replace the social benefit with the citizen’s income.
This plan had already been established in coalition agreement. In the meantime, an introduction date has also been set: the changeover will take place on January 1, 2023. And even if the Hartz IV system is not completely overcome by the introduction of citizen income, but is rather reformed, there are some important differences between the two benefits.
Hartz IV becomes citizen money: More money thanks to higher standard rates
One of the main criticisms of Hartz IV is that the standard rate would not be sufficient to cover the actual costs of the recipients. The federal government seems to have taken this to heart: For that citizen money a significant increase is planned.
| Hartz IV | citizen money |
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The standard rate for a single person with Hartz IV was 449 euros per month. |
In the case of citizen income, the standard rate is significantly higher at 502 euros. |
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In addition, certain costs are covered by the job center, such as rent or heating costs. However, there are upper limits for this. |
Certain costs are also borne by the job center for citizen income. In comparison to Hartz IV, however, there is no upper limit for the rent in the first year of occupancy. |
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Increases in the Hartz IV rate were based on the average price and wage development of the previous year. This means that if there is a sharp increase – for example due to inflation – Hartz IV recipients will only receive more money a year later. |
According to Chancellor Olaf Scholz (SPD), the rates of citizen income should be “based on the forthcoming inflation rate”. In concrete terms, this means that the inflation expected for the future is already being offset by higher rates in the present. |
Even if the conversion from Hartz IV to citizen income entails an increase in standard rates, social associations are disappointed. An increase of 50 euros would not secure the subsistence level, said VdK President Verena Bentele the NDR. Ulrich Schneider, President of the Parity Welfare Association, described the planned increase as a “bad joke”.
Sanctions: The differences between Hartz IV and citizen’s income
unemployment benefit II is not readily available – recipients must meet certain obligations. That was the case with Hartz IV and should remain so with citizen income. If service recipients disregard these conditions, the standard rates can be reduced. However, there should be changes.
| Hartz IV | citizen money |
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Recipients of Hartz IV have so-called duties to cooperate. This includes having regular appointments at the job center, taking part in integration measures and accepting reasonable jobs. |
Even after the changeover to citizen income, the obligation to cooperate should continue to exist. In the law, the government writes of “own efforts, participation in measures and applications”. |
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If they do not comply with these obligations, their remuneration may be reduced. In extreme cases, i.e. if a recipient repeatedly violates conditions, the benefits can even be canceled completely. Most recently, however, a so-called moratorium was in effect: As a result, most of the sanctions were suspended for a year. |
There are also penalties for citizens’ income. However, a maximum of 30 percent of the standard rate can be deleted. An initially planned period of trust of six months, during which no sanctions should be imposed, was removed from the draft law after the Union blocked the citizen’s income in the Bundesrat. |
Assets: Significantly higher limits than with Hartz IV
Also at Assetsthat recipients of unemployment benefit II are allowed to have, the introduction of citizen benefit will lead to changes. In concrete terms, this means that more possessions are allowed.
| Hartz IV | citizen money |
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Only those who are “needy” are entitled to Hartz IV. In concrete terms, this means that only those who cannot cover their living expenses with their income or assets receive unemployment benefit II. |
The principle of neediness also applies to citizen income. However, there is an increased asset limit in the first year of receipt: anyone who owns less than 40,000 euros is entitled to benefits. In communities of need, this limit only applies to the first person, for each additional person it is 15,000 euros. |
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If the assets of a Hartz IV recipient exceed a certain limit, they must first be used to cover living expenses. Only then are state benefits paid. Most recently, the asset limit was a maximum of 10,050 euros, depending on age. |
If a person receives citizen income for more than a year, the asset limit drops significantly. However, at around 15,000 euros, it will still be above the Hartz IV limit. |
Size of the apartment: basic income with more freedom
In the past, the transition to Hartz IV involved moving for many people. Because: it was apartment too big, took over that Job centre not the rent. This will change with the citizens’ income – at least in part.
| Hartz IV | citizen money |
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Anyone who receives Hartz IV must provide precise information about their apartment at the job center. These affect both the size and the amount of the rent. If certain values are exceeded, the job center will not bear the costs. |
As with assets, there will be a one-year period for the apartment. During this time, the costs are recognized without an upper limit. |
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Currently, the size of an apartment for one person must not exceed 50 square meters. With two people, the value increases to 60 square meters. How much rent is paid depends on the respective municipality and the comparative rents there. |
At the end of the two years, the requirements that applied under Hartz IV for living space and rent will come into effect. |
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