The rising prices put many people in Germany under pressure. While some are better able to cope with the explosion in costs, others need help. In the future, the citizen’s allowance should replace Hartz IV and support those who are most affected. FOCUS online explains what you need to know about the new citizens’ income.

Hartz IV will soon be history. After years of criticism and discussions about the Act on Unemployment Benefit II, Hartz IV is to be replaced by so-called citizen benefit in the coming year. It should enable social participation and respect human dignity. The citizen’s income is intended to ensure sustainable integration into the labor market and at the same time be easy and digitally accessible.

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The federal government wants to send a signal for security and create more respect, it is said. Here we explain how this is supposed to succeed and what exactly citizen income actually is. The most important questions and answers about the largest social reform in the Federal Republic in years.

January 1, 2023 is the deadline for the new citizens’ allowance in Germany. After the turn of the year it is planned that the Citizens Income Act will come into force and be implemented step by step. Hartz IV, also known as unemployment benefit II, and the social benefit are then replaced by the basic income or basic security for people looking for work – the citizen benefit.

Citizens’ income is intended to provide job seekers with basic security. This means that the citizens’ allowance is intended to ensure that they can secure their living needs and do not slip below the subsistence level.

Anyone who has previously been entitled to unemployment benefit II or social benefit is entitled to citizen benefit. In this case, an application does not have to be submitted.

According to the law, you are entitled to the citizen’s benefit:

Specifically, this means that “employable” people over the age of 15, those under 15 and over 65 in need of help, people who cannot cover their living expenses on their own and people whose benefits under the Unemployment Act I expire can receive citizen benefit.

The citizen’s income should include a subsistence amount. Against the background of the current situation, such as the rising prices for everyday things, “an appropriate increase in the standard rates is required”, according to the website of the Federal Ministry of Labor and Social Affairs (BMAS).

As of January 1, 2023, this will increase by EUR 53 to EUR 502 for a single person. This increase is the highest since basic social security was introduced in 2005.

In addition, the following rules apply:

This is how the citizenship fee is calculated:

If you want to receive citizen money, you have to submit an application. Municipalities, city administrations or municipal administrations of your own place of residence are the first points of contact for this application. The job centers are responsible. Without the application, there is no possibility of obtaining citizen benefit.

The application for citizen’s benefit is initially informal. However, timing is important. Because: The application for citizen benefit only has a limited retrospective effect. The application itself should be made possible digitally: by e-mail or online on the website of the administration.

The decisive factor for the payment of the citizen’s benefit is the application. There is only money if a corresponding application has been made. Entitlement to the citizens’ allowance only exists from the point in time at which the application has been received by the authority. There is only a retrospective claim in exceptional cases.

In any case, people who receive the citizen’s income may stay in their apartments for the first two years of receipt. Whether the housing costs are reasonable is irrelevant in the first two reference years.

The new citizens’ income should also make it possible to save. Assets of up to 60,000 euros are spared. This means that assets up to this amount are not counted towards the entitlement to citizen income. This also only applies to the first two years. Each additional person in a benefit community can also put aside 30,000 euros. For a family of four, savings of up to 150,000 euros would be protected.

In addition, the allowances for people receiving citizenship benefit will be increased. From the third year of benefit receipt, larger living areas are recognized and exempted for home ownership than was previously the case with Hartz IV. More assets are also fully exempted. For example, in the case of the self-employed, all insurance contracts that serve to secure old age are not to be taken into account as assets up to a legally determinable amount, explains the Federal Ministry of Labor and Social Affairs.

If Hartz IV recipients did not keep to agreements made with the job center, sanctions were used. Although the sanctions are relaxed with the citizens’ income, they are not abolished.

The sanctions are being reorganized and reorganized. The most important new rule that comes with citizen income is the trust period of six months. During this time, a reduction in benefits is excluded.

There will also be reductions in benefits for citizens’ income, but these will be reorganized. After the submission of a first jointly developed cooperation plan, a six-month period of trust applies. During this time, there are no legal consequences for breaches of duty.

If, however, the agreements on the obligation to cooperate, which can be personal efforts, participation in measures and applications for placement proposals, are not complied with, these obligations are legally binding through requests with legal consequences.

These regulations apply after the end of the trust-based working hours:

The idea: According to the BMAS, jobseekers should be supported “more than before on the way to long-term, sustainable employment” with the basic income. “Quick mediation” should be a thing of the past.

Furthermore, the basic income is intended to provide more support for further vocational training in order to fill the large gaps in the labor and skilled labor market. To this end, those who opt for training or retraining should be given more support.

A vocational qualification can therefore also be obtained in three years instead of two. It should also be easier to acquire basic skills. Anyone who takes part in qualification-related further training should be supported with an additional monthly further training allowance of 150 euros. Also new: Those who take part in measures that help in particular to find their way back into the labor market in the long term will receive a citizen’s income bonus of 75 euros per month.

The previous integration agreement from the Social Security Code II is no longer valid and is replaced by the so-called cooperation plan. This is worked out jointly by beneficiaries and integration specialists.

This plan, written in simple language, is intended to serve as a “red thread” in the integration process and is a core element of the citizen income law. The area of ​​responsibility for those entitled to benefits is thus increased and trust in the integration specialist should be strengthened.

After the joint development of a cooperation plan, a six-month period of trust follows. In this case, no legal sanctions will come into effect if duties are breached. After this time, the obligations are legally binding through requests with instructions on legal consequences if agreements made are not complied with.

Our reading tips on citizen income:

Basic requirement: The consultation appointments must always be kept. In the event that problems or conflicts arise in connection with the development, implementation and updating of the cooperation plan, an arbitration mechanism should be created.

The start will be made at the beginning of next year with the Citizens’ Income Act. Further changes will then be introduced step by step.

In the course of this, the support options for young people and adults who are particularly remote from the labor market are to be improved and their local scope for action expanded. In addition, target control is to be further developed. The sustainability of integration should also be strengthened. Finally, further support options for people with health restrictions are to follow.

Unemployment benefit II aka Hartz IV will no longer exist from January 1st. Citizens’ allowances will take effect at this point, also to reduce bureaucracy, which was considered too high for unemployment benefits II.