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Basic income support for job-seekers

March 1, 2013

A tax-financed state welfare system


Unemployment benefit II

When Book Two of the German Social Code (SGB II) came into effect, it created a benefits system which helps people help themselves in times of need; assistance that eligible persons have a legal right to. One of its fundamental aims is a sustainable increase in employment prospects and to overcome long-term unemployment among people who have particular difficulties on the labour market.  With its basic income support for jobseekers the State is meeting its obligation to create minimum requirements for quality of life (subsistence level).

Basic income support for job-seekers is a tax-financed state welfare system which primarily provides payments to employable persons in need of assistance to integrate them into the labour market or into employment. In addition, persons who are fit for employment and in need of assistance who cannot find a job in spite of intense efforts, or who do not earn an income covering their needs with their gainful employment, are entitled to payments to secure subsistence in the form of unemployment benefit II, which is also granted as a supplemental (top-up) benefit in addition to their income.

The constituent parts

Unemployment benefit II encompasses payments to secure subsistence in the form of standard benefits including the commensurate costs for accommodation and heating. Over and above this, additional needs are allowed for special circumstances such as disability, pregnancy, single parenting or costly nutrition required for health reasons. Furthermore, potential one-off payments are possible for example for furnishing a first home, for clothing, for pregnancy and childbirth. In addition to basic needs cover there are funds available to help children and adolescents take part in social and educational activities.

Helping one another

Basic income support for job-seekers pursues a household-related approach, meaning that in addition to persons who are fit for employment and in need of assistance, dependents living together in a joint household can also receive payments to secure subsistence if they are in need, either in the form of unemployment benefit II or of social assistance. However, this also means that the joint income and assets, taking into consideration exemptions and income testing-exempt assets of the members of the joint household, must be used to cover subsistence.

Income from gainful employment

Many people in need of assistance take up marginal part-time work to remain in contact with the labour market. This is very much encouraged. The provisions relating to basic income support for job-seekers advocate taking up gainful employment: mini-jobs, midi-jobs and part-time jobs help recipients of unemployment benefit II to earn at least a part of their subsistence themselves. The legal provisions with regard to benefits on taking income from gainful employment into account ensure that those who do so have more household income at their disposal than those who do not work at all.

Protected assets

Persons who have assets that could be used to ensure their livelihood and are therefore not in need of assistance are not entitled to payments to secure subsistence. There are, however, exemptions up to specific ceilings, which primarily protect reserves serving retirement provisions. In addition, a commensurable home property occupied by that person or a commensurable motor vehicle are not included in the assets.