German Government Plans Stringent Rules For Social Welfare Benefits
...As Scholz Promises Businesses More Relief From High Electricity Tarrifs
The German government has revealed plans to tighten rules for recipients of welfare benefits, including by stiffening penalties for those who don’t pursue work, under a plan approved by the Cabinet on Wednesday.
Under the reforms, anyone who refuses a reasonable job, training scheme or other employment measure without a valid reason will in future face an immediate 30 percent reduction in basic income support for three months.
A report by the German News Service (delivered by dpa), affirmed that anyone who fails to attend appointments at the government job centre without good reason will also receive a 30 percent reduction in benefits for one month, instead of the previous 10 percent penalty.
German Employment Minister, Hubertus Heil, a Social Democrat (SPD), said anyone who does not cooperate or cheats by working illegally while still claiming benefits “must expect harsher consequences.”
The changes will be sent to parliament and are expected to be passed and come into force at the turn of the year, Heil said. The Labour Ministry said the plan will deliver “more commitment, more labour market integration and more fairness in the welfare state.”
Heil said that job placement and training remain at the core of Germany’s long-term jobless benefits in order “to get people into work.”
Longer commuting times of up to three hours will also now be considered “reasonable” for job offers, although there are some exceptions for those who also have to care for family members.
The plan also calls for offering businesses subsidies for hiring refugees, as well as for allowing them time off to attend vocational language courses.
That step is largely aimed at Ukrainian refugees, a large number of whom are receiving welfare benefits but lack the basic German language skills generally required for most jobs in the country.
Last year, 65 percent of Ukrainian refugees in Germany received welfare benefits, according to data from the Federal Employment Agency.
Meanwhile, German Chancellor Olaf Scholz has promised to deliver more relief from high electricity prices that have hampered the country’s economy in remarks to business leaders.
Scholz said yesterday that energy security should be created to ensure that transmission grid fees do not continue to rise. In the short term, this could be achieved through a federal subsidy to expand the country’s power grid.
Scholz’s remarks were made at a business conference in Berlin organized by the BGA foreign trade association.
A planned subsidy of up to €5.5 billion ($6.1 billion) had initially been planned for this year to finance transmission grid costs and relieve the burden on companies.
But a landmark budget ruling by Germany’s Constitutional Court that struck down plans by Scholz’s coalition to use special funds to finance investments blew a massive hole in the budget, and halted the grid subsidies.
Scholz’s government has proposed other ways of reducing the grid fees charged to businesses and households in order to fund the costly expansion of Germany’s electric transmission system.
An amortization account could be used to spread the costs of expanding the electricity grids over greater periods of time.
Scholz noted that a scheme of electricity price compensations already helps offset the burden of high electricity prices on many energy-intensive companies.
However, he added that the aim was to see whether the group of companies receiving relief could be expanded.
