Citizen's income - new paradigm or more of the old?

Hartz IV - or officially: Unemployment Benefit II - has been called "Citizen's Income" since January 2023. It was a tough struggle between the coalition partners and later between the government and the opposition. It is now being paid out and the new form of basic income support has become somewhat quieter. But how new is it and how should it be classified? A blog post by Ute Fischer.

Citizen's income sounds like a good idea at first. It sounds like money for citizens (certainly also for female citizens). It almost sounds like a basic income, a monthly payment for everyone without conditions. It sounds like progress compared to the heavily criticized Hartz IV, which turned the unemployed into supplicants due to the often undignified treatment in the job center or conditions that often seemed quite pointless, such as when the third Excel course was supposed to document the willingness to continue training.

The Citizen's Income had already been announced by the SPD as a significant improvement during the election campaign ahead of the 2021 federal elections. Hubertus Heil, the then and current Federal Minister of Labor and Social Affairs, never tired of emphasizing the need for more respect and recognition of lifetime achievements. The SPD's election manifesto stated: "An uncomplicated citizen's income that consistently focuses on help and encouragement instead of sanctions and does not turn the purchase of a new washing machine or winter jacket into an unbearable burden. In the first two years, neither assets nor the size of your home will be checked. And those who continue their education will receive an additional bonus."

And this is more or less how it ended up in the Ampel government's draft bill: the citizen's income was planned to be €53 higher than Hartz IV and would amount to €502 per month for individual recipients. The former integration agreement, which was not on an equal footing but could ultimately be enforced by the authorities, was now called a cooperation plan under the draft law. Holistic support has now been renamed coaching. And during a "period of trust" of six months, existing assets were not to be taken into account, meaning that anyone who had saved would not be penalized. The highly controversial sanctions were also to be suspended during this period. A further waiting period of two years would also leave housing untouched and recipients of citizen's allowance would not have to move into a smaller apartment.

However, criticism was not long in coming. Counter-arguments were voiced by both left-wing and conservative parties in the run-up to the Bundestag elections, but even more so when the cabinet's draft bill was negotiated. Politicians from the left and the Greens, as well as social associations, pointed out several points: an insufficient increase in the Citizen's Income rate, especially in view of inflationary price increases for everyday needs, as well as adherence to the - albeit weakened - idea of sanctions, and finally the untouched requirement to earn a living as proof of a decent life and the basis for state benefits.

Conservatives saw "false incentives" in the citizen's income. It was feared that gainful employment would not be worthwhile enough because the wage gap between the minimum wage and the citizen's income would be too small. Regardless of other calculations, e.g. in the social policy portal. The protected assets of 60,000 euros, which should remain untouched, are also too high. It is difficult to remain objective in the incentive discussion. You don't have to share the image of the donkey chasing a carrot. However, the debate about the right incentives is based on the assumption that gainful employment is something that people can only be motivated to do extrinsically. And the employment-centered nature of social legislation is also worthy of discussion. Does it really correspond to the basic right to a decent life?

In the Bundesrat, mistrust prevailed as a general suspicion of the unemployed. The federal states led by the CDU and co-governed by them voted against the draft and thus blocked the legislative process. The mediation committee had to take up the matter. Such processes do not exactly build trust for those affected: Trust is not a one-way street. Those who are not trusted are also mistrusted, especially as a growing number of citizens' very existence is at stake.

Finally, we need to ask what happens to terms when they are used. The "citizen's income" as a reform idea can already be found in the 1980s, when the FDP was considering a negative income tax to simplify the bureaucracy of social transfers (Mitschke 1985) or in the proposal for a "solidarity-based citizen's income" by the former Minister President of Thuringia, the CDU politician Althaus (2007), which went in the direction of a basic income, albeit a small one. The term has now been used for further debates, for example on an unconditional basic income.

However, the debate should be held, as the citizen's income in its current form also has its shortcomings. In the compromise reached, the idea of sanctions has once again been reinforced, thus maintaining the stigmatization. Unconditionality is obviously difficult to think of as an alternative concept of justice and it is even more difficult to find a majority for it. Apart from this fundamental objection, the amount of the citizen's income - despite the increase - only minimally corresponds to the need for subsistence and socio-cultural participation, as provided for in the Basic Law. Accordingly, the basic income will remain under discussion, as recently demonstrated by a renewed push by Green Party leader Ricarda Lang for an inflation-appropriate calculation and corresponding increase in standard rates.