Will the increase in the Citizen's Income come or not? The stern asked

Debate about new rate - Will the increase in the Citizen's Income come or not? The stern asked

There is a shortfall of 17 billion euros in next year's budget. The FDP and CDU/CSU are therefore also calling for cuts in social spending. They are particularly bothered by the fact that the standard rates of the citizen's allowance will rise by around 12 percent at the beginning of the new year, from 502 euros to 563 euros per month for a single person.

In the tight budget situation, this is offending some: "It is unacceptable that we are increasing the citizen's allowance by 12% in times of tight budgets and with the lowest inflation since 2021," Bijan Djir-Sarai told Bild am Sonntag. CDU Secretary General Carsten Linnemann explained on Deutschlandfunk radio that the Citizen's Income had increased by 25 percent in the past two years, and that no employee had received such a wage increase. CSU leader Markus Söder demanded in the stern interview: "The traffic light must postpone the increase planned for January by one year and completely reschedule it."

Does this mean that the five million or so recipients of citizen's income cannot be sure of the higher standard rates after all? Labor Minister Hubertus Heil from the SPD ruled that out on Tuesday: People had suffered last year and were still suffering from "very high prices", for example for food and electricity. As they have no reserves, they are dependent on the rates being adjusted. "That's why it will happen," said Heil. The standard rates are intended to cover expenses such as food and clothing, as well as electricity. In addition, recipients are paid rent and reasonable heating costs, among other things, by the job center.

Suspension would not be legal

In fact, it would not be legally possible for the minister to spontaneously suspend the increase for January. This is not due to an arbitrary political decision, but to a mechanism designed to ensure that the minimum subsistence level of social benefit recipients is covered even in times of rising prices. If the increase were to be reversed, the legal basis for it would have to be changed - which would not be possible in December.

In the current situation, such a change would probably not stand up in the event of an appeal to the Constitutional Court. Karlsruhe has stipulated in several decisions in recent years that the legislator must ensure that the minimum subsistence level of the recipients is guaranteed at all times. Justifying the lack of an increase with a tight budget situation - as demanded by the CDU/CSU and FDP - is probably not permissible: "The fact that you want to save money in general or take into account the supposed sensitivities of other population groups is not a constitutionally viable reason," says Andrea Kießling, Professor of Social Law at Goethe University in Frankfurt, to stern.

Is the adjustment up-to-date enough?

Whether the adjustment mechanism is generally the right one - regardless of the upcoming increase - is open to debate. The traffic light system was only redesigned last year and the CDU/CSU agreed to it. What's the issue?

The basic procedure that determines the level of the standard rates was introduced back in 2010 and therefore already applied to the predecessor to the "Hartz IV" citizen's income. At that time, a coalition of CDU/CSU and FDP was in power and the Minister of Labor was Ursula von der Leyen. Roughly speaking, every five years the Federal Statistical Office determines what the poorest section of the population spends on which items. This is known as the representative income and consumption sample (EVS). This is then used to determine what is necessary for the minimum subsistence level of social benefit recipients. Some things are deducted, such as expenses for cut flowers. According to the legislator, these are not necessary for existence.

In the years between these surveys, the Hartz IV rates were then and are now adjusted to the development of prices and wages - inflation is weighted at 70 percent and wage development at 30 percent. In the past, however, this adjustment was made with great delay. This is why Ampel has changed this increase mechanism: For the 2024 increase, data up to the second quarter of 2023, for example, is now taken into account.

Is that up to date enough? "The unease of some people stems from the fact that the upcoming increase is based on high inflation, which has already fallen again," Enzo Weber from the Institute for Employment Research told stern. Even if these concerns are not justified in themselves, as inflation is still included in the prices, the economist sees scope to be even more up-to-date in the assessment: "At the moment, we are including the development up to June 30 of the previous year, which could be extended to the end of September," says Weber.

CDU politician: "Increase goes beyond the current level"

In order to compensate for inflation as accurately as possible, the Ampel has even introduced an additional component. This adds the inflation rate from the second quarter to the standard rate. "Inflation is therefore included more than once in the short term," says Weber. But is this the right approach? Kai Whittaker, a specialist politician from the CDU, takes issue with this. "The current mechanism, namely including a total of five quarters, has no logic in itself," the MP tells stern. For him, it is therefore legitimate to discuss how much the Citizen's Income should be increased: "The planned increase of 61 euros exceeds the current level". He advocates returning to the legal situation that applied before the reform of the Citizen's Income - but also introducing an emergency mechanism that would take effect if the purchasing power of Citizen's Income recipients fell after an increase.

In any case, a change to the calculation at this point in time is not only unlikely, as the SPD and the Greens are likely to want to prevent this with all their might. Nor is it likely to lead to large sums being saved - because the Constitutional Court sets tight limits on the minimum subsistence level. Minister Heil sees only one way to reduce expenditure on the Citizen's Income, which will amount to more than 25 billion euros in 2023. "If you want to save costs in the Citizen's Income, the best way is to get people into work," said Heil on Tuesday. The government has taken this path - for example with the "job turbo", which aims to get refugees into work more quickly.