Questions and Answers on Hartz IV in Munich

Transcription

1 State Capital Munich Social Department Questions and Answers on Hartz IV in Munich Eine Information in englischer Sprache Support and demand: Why is there Hartz IV? With Hartz IV, unemployment aid and social welfare are combined into one standard benefit. "Aid from one source" is in the foreground. Municipality and Agency for Work group their assistance in order to be able to support and place jobseekers more intensively. This saves those persons who are entitled to aid having to make their way to two local authorities. In the media, Hartz IV has been subject to massive criticism because assets and even the children's savings books have to be used to cover the need. This is nothing new; rather, it corresponds to what has been asked up to now of those persons entitled to social welfare. Two-thirds of future unemployment benefit (ALG) II -recipients know these regulations. Hartz IV even means an improvement for them in some points, because they can keep more assets than in social welfare and now also have a pension scheme as well as private nursing and health insurance. Furthermore, the car is now also part of the protected assets. "Support and Demand" are in the foreground of the reform. In future, Agency and Social Department will assist aidrecipients able to participate in gainful employment in their search for a new workplace, qualifications, child care, and in finding language courses or other meetings. An integration agreement is concluded with those persons entitled to aid that gives details of what people have to do to integrate into the job market and what benefits they receive. The dignity of the aid-recipient is respected. If you have any general questions on ALG II / social security and the application, contact the info-telephone of the Agency for Work, tel Anyone now receiving income support should get in touch with the person responsible in the social municipal hall, in the branch of the Social Security Office or in the central unit for the homeless in the Office for Living and Migration. Below is an overview of frequently asked questions on Hartz IV. This document and other information on Hartz IV are retrievable on the Internet: or www. muenchen.de/hartz

2 2 How many people receive unemployment benefit II (ALG II)? From January 2005, 70,000 people will receive ALG II in Munich. These people live in 42,000 households, of which almost 24,000 have received income support up to now. Who receives unemployment benefit II (ALG II)? ALG II is given to all persons between the age of 15 and 64 who are fit for gainful employment and need assistance because they do not have enough income and assets to pay their living and rent costs themselves. This can occur when the insurance benefit ALG I expires or the earned income is too low. Household members not fit for gainful employment as well as children receive social security. Anyone who can work at least three hours a day is fit for gainful employment. How high are the benefits? The benefits cover the livelihood-securing need. This corresponds to the current Munich social-security level. The need will be determined for each family member: Normal benefit rate for adult, single person: Normal benefit rate for two adult partners: each Normal benefit child (0-14 years) Normal benefit young persons (15-18 years): plus appropriate rent and heating. In exceptional cases there are one-off benefits. After receiving ALG I there is another limited surcharge. If this calculated need cannot be covered out of - own earnings - the partner's/spouse's earnings - the child's earnings (child benefit, maintenance) or - from the assets of the subsistence community, unemployment benefit II will be paid. Compared with the income support up to now, the Christmas allowance and one-off benefits like allowances for a cycle, child safety seat or school are dropped in future. This is settled with the normal benefit. The Munich city council no longer has any influence on the amount of minimum rates either. They are a federal benefit from January 2005.

3 3 Which relatives are brought in? Income of the partner/spouse that lives in the household is brought in. Maintenance recourse is also possible towards the divorced or separated married partner. Parents whose adult children have been unemployed for a long time are only rarely brought in. Underage aid-recipients who are younger than 25 have to be supported by the parents if the initial training has not yet been concluded. Parents are also under obligation to provide maintenance if they were sued for maintenance by their employable children. Adult children whose parents receive ALG II are not under obligation to provide maintenance. How many assets are you allowed to have? Assets have to be used up to certain levels. 200 per year of life are protected - a minimum of 4,100, a maximum of 13,000 per employable person. Persons born before 1 st January 1948 have an allowance of 520 per year of life, a maximum of 33,800. If you have more than that, you are not needy. 750 is also protected for each person living in the subsistence community. Children are allowed to keep 4,100. Examples of assets are cash money, savings such as securities, building savings, house and property as well as personal property such as objets d'art. The self-used appropriate residential property as well as a reasonable car are not included in the assets and may be kept. Asset limits are higher than in the income support. The allowances for employable persons entitled to benefits are more generous than before. The car was not protected in the social security either. How high is the allowance if you are gainfully employed? Unemployed persons can earn in addition to the ALG II. Workrelated costs like travelling expenses are deducted from the net salary. People can keep the following allowances from this adjusted income: - 15% at a gross salary up to % at a gross salary between 401 and % at a gross salary between 901 and 1, There are no allowances if earnings exceed 1,500.

4 4 What about life insurance and other old age pension schemes? Life insurance must always be used if the repurchase price exceeds the abovementioned asset limits ( 200 per year, at most 13,000 per person). The life insurance can be protected as an old-age pension scheme within this asset allowance if the utilisation of the life insurance before going into retirement is contractually excluded by a restriction notice. A current life insurance does not have to be sold if a loss of more than 10% of the paid-in premiums is created. The Riesterrente and assets important for the old age pension scheme amounting to 200 per year of life are also protected. In the BSHG the life insurance was only protected up to a limit of 1,279. In cases of hardship the life insurance remained protected; social security was only granted on a loan basis. How high is the rent allowed to be? Rent and additional costs incl. heating are taken fully into consideration in the requirements calculation if they lie within the upper rent limits. For Munich, these amount on average to 10 per square metre (see upper rent limits Page 8). Accordingly, a four-person family can live in an apartment with a maximum of 90 square metres. The maximum upper rent limit, not including heating and other costs, is If the rent exceeds the upper rent limits, the rent will be paid in full for six months. The person entitled to aid is obliged to reduce the excessive costs, e.g. through sub-tenancy. He can use the help of the working group for this. For self-used residential property, the interest due is taken over in cases of neediness in addition to the actual charges such as council tax, refuse charges or cold water. The repayment instalments are not taken over. When is the aid reduced? Example: unemployment benefit II is reduced by 30% of the normal benefit if the person entitled to assistance refuses to begin or continue a reasonable job of work or training. If the person entitled to aid does not register, the normal benefit is shortened by 10%. In the event of repeated breaches of duty, there is an additional reduction of the same percentage. The reduction lasts for three months. If underage children live in the household, additional non-cash benefits such as food vouchers can be issued if the reduction exceeds more than 30%.

5 5 Where are the ALG-II recipients and their relatives looked after? The Labour Agency and the City of Munich work together in a working group. At the end of 2006 it is planned that all ALG-II recipients will be looked after in the social municipal halls. All aids that the people need are there. Employees from both local authorities calculate the payment there, offer social consultation, arrange work or organise qualifications and courses. In the transitional period, the current unemployment benefit recipients are looked after in the Labour Agency in the Kapuzinerstrasse 26 and by the consultancy service ALG II/Sozialgeld in the Thalkirchnerstrasse 54. Those persons current entitled to social security are looked after as always in the Social Security branch offices and the social municipal halls. Where do the jobs for mediation come from? The City and the Labour Agency want Munich to remain the city with the lowest unemployment figures. The Social Department and the Department for Work and Economic Affairs have built up a varied network of employment possibilities with supporting authorities for the 2 nd job market. Consequently, even people with worse qualifications have the chance to be integrated into the job market on a fairly long-term basis. The city council has provided 35 m for next year. Together with the instruments of the Labour Agency, Munich has 86 m available next year to arrange qualifications for people, work tests or other measures of the 2 nd job market. This alone is not enough. The companies in the city also have to take responsibility and create workplaces. What work is reasonable? Any work is reasonable: It has to correspond to the health performance and must not make the return to a previously practiced job more difficult. The education of the children must not be endangered; the child should be in a child-care facility from the age of three. The work should also be compatible with caring for a relative.

6 6 Comparison income support and unemployment benefit II (ALG II ) Example 1: Four-person family, parents unemployed, children 7 and 12 years old Income Support ALG II Basic rate for householder Lump sum Basic rate for wife Lump sum Basic rate for child (7 years) Lump sum Basic rate for child (12 years) Lump sum Average rent + heating ,-- Requirement 1, , minus child benefit 3) (2 x ) (2 x ) Possible income support/alg II 1, , Difference Example 2: Single parent with 14 year-old daughter and 14 year-old son Income Support ALG II Basic rate for householder Lump sum Increased demand for single parents Basic rate for daughter (14 years) 174, Lump sum Basic rate for son (14 years) Lump sum Average rent + heating Requirement 1,416,90 1, minus child benefit 1) (2 x ) (2 x ) Possible income support/alg II 1, , Difference The last child benefit increase was not considered earnings for income support. Child benefit first goes directly to the parents' account and is then deducted again.

7 7 Comparison unemployment aid and unemployment benefit II (ALG II) Example 1: Man, skilled metal worker, 45 years old, average wage group, employed 10 years; Woman, specialist sales assistant, 32 years old, employed 10 years. Both currently receive unemployment aid. Unemployment aid ALG II Normal benefit for husband Normal benefit for wife Rent incl. heating (upper rent limit) Total , Difference * Example 2: Man, forwarding merchant, 40 years old, average wage group, employed 20 years, receives unemployment aid; Wife, part-time employment, earns net; Child,13 years old Unemployment aid ALG II Normal benefit for husband 1,040, Normal benefit for wife Normal benefit for child Rent incl. heating (upper rent limit) Requirement 1, Minus wife's earnings, after taking the tax allowance into consideration income wife minus child benefit Total 1, , Difference * *The difference is reduced in the transitional period with a limited surcharge. 1 Child benefit first goes directly to the parents' account and is then deducted again in the demand assessment.

8 8 Upper rent limits (as of ) Number of persons Apartment size ***) 1 Sublet room furnished*) 1 20 ~ ~ ~ ~ ~ ~ ~ 135 Upper rent limits Building age class **) Max. m² price ***) Upper rent limit Rent not including heating and other costs plus additional costs, heating and warm water m² ***) **) ***) Up to , , , The size of the apartment must be increased by 15 square metres for every additional person and a surcharge of levied for each building age class. *) furnished sub-let room fitted with bed, cupboard, table, seats, curtains, lamp and with use of kitchen and bathroom **) Building age class 1: up to and including 1966 Building age class 2: Building age class 3: from 1978 ***) Size of the apartment in m²: the square metres of the entire apartment count, including kitchen and bathroom. Balcony and terraces count as half based on the II. computation ordinance concerning rent.