Hartz concept

The Hartz concept , also known as Hartz reforms or the Hartz plan , is a set of recommendations submitted by a committee to the German labor market in 2002. Named after the head of the committee, Peter Hartz , these recommendations went on to become part of the German government ’s Agenda 2010 series of reform, known as Hartz I – Hartz IV. The committee devised thirteen „innovation modules“, which recommended changes to the German labor market system. The Hartz I measurements were then undertaken between January 1, 2003, and 2004, while Hartz IV was implemented on January 1, 2005.

The „Hartz Committee“ was founded on February 22, 2002 by Gerhard Schröder . Its official name was Kommission für moderne Dienstleistungen am Arbeitsmarkt (Committee for Modern Services in the Labor Market). The 15-member committee was chaired by Peter Hartz , then Volkswagen’s personal director.

Hartz I, II, and III

Hartz I and II both came into effect on January 1, 2003, aiming at making new types of jobs easier to create, and covered, for example:

Hartz I

  • The foundation of „Staff Services Agencies“ ( Personal-Service-Agenturen or PSAs).
  • Support for further training from the German Federal Labor Agency.
  • Subsistence payments by the Federal Labor Agency.

Hartz II

  • New types of employment, Minijob and Midijob , with lower or rising taxes and insurance payments.
  • A grant for entrepreneurs, known as „Ich-AG“ ( Me, Inc. ).
  • A rise in the number of job centers.

Hartz III

  • Hartz III cam into effect on January 1, 2004. This measure Was avocation at restructuring and reforming Job Centers , Whose Name Was changed from the Bundesanstalt für Arbeit or Arbeitsamt (Federal Labor Institution), to the Bundesagentur für Arbeit gold Agentur für Arbeit (Federal Labor Agency).

Hartz IV

The fourth stage of the reform was voted by the Bundestag on December 16, 2003 and by the Bundesrat on July 9, 2004, to take effect by January 1, 2005.

This share of the Reforms Brought together form the unemployment benefits for the long-term unemployed ( ‚Arbeitslosenhilfe‘) and the welfare benefits ( ‚Sozialhilfe‘), leaving Them Both Approximately at the lower level of the train Sozialhilfe (social assistance). The level for a single person was € 374 per month (known as the Regelsatz ). This was further raised to € 391 per month, in 2013. [1] Added to this is the financial assistance with housing and health care. Couples can receive benefits for each partner plus their children.

Prior to 2005, between 12 and 36 months of their full unemployment benefit (60 to 67% of the previous net salary) were followed by the Arbeitslosenhilfe (unemployment assistance), amounting to 53 to 57 % of the last net salary). Since 2008, eligibility for the full unemployment benefit (renamed Arbeitslosengeld in 2005 and commonly referred to as Arbeitslosengeld I in everyday German to contrast it with the lower benefits discussed) has been restricted to 12 months in general, 15 months for those aged 50 gold older, 18 months for those 55 or older and 24 months for those 58 or older.

This is usually followed by Arbeitslosengeld II (Hartz IV) benefits if the claimant meets the eligibility requirements.

Whether or not a claimant is eligible for Arbeitslosengeld II depends on its life insurance and the income of spouse or partner. If these assets are below a threshold level, claimant can get money from the state. The threshold level in July 2008 was € 150 for free assets (at least € 3,100) and € 250 for fixed retirement assets, both calculated per capita and lifetime year. [2] In addition, each employable individual in a communal household may be one of the following: 7.500 and a self-used house of 130 square meters living space (more if there are other people in the common household).

To receive payments, a claimant must agree to a contract subject to public law . This contract outlines what they are obliged to do to improve their job situation, and when the state is obliged to help. An unemployed person may be required to accept any kind of legal job. This compulsion is restricted by constitutional rights, like freedom of movement, freedom of marriage, marriage and human dignity . If taking a specific investment is deemed reasonable by the responsible agency, it does not apply to a complete reduction of the payment.

Within the Arbeitslosengeld II schemes, the state covers the health insurance of the unemployed. Until the end of 2010, payments towards the pension scheme of the claimant were also made.

It is feasible to earn income from a job and Receive Arbeitslosengeld II benefits at the time Sami. Job income is debited from Arbeitslosengeld II payments according to a formula that leaves a certain amount of additional revenue untouched. These revenues are: a certain amount of savings (which increases with age); € 100 plus 20 percent of the wage up to € 800 plus 10% of the wage up to € 1200 (up to € 1500 if there are children). Through this mechanism Arbeitslosengeld II can be regarded as a minimum wagefloor for employees without assets, where the minimum wage is not fully paid by the employer but assured by the state. There are criticisms that this defies competition and leads to a downward spiral in wages and the loss of full-time jobs.

The Hartz IV reform merged the federal level unemployment agency with the local level welfare administration. This facilitates a better case-oriented approach to helping people find work and improve their situations. The plan is objective to reduce caseloads from 400 individuals to more than 75 (aged 25 or less), or to more than 150 persons over the age of 25. Legally, however, the agencies remain separate.

The Hartz IV reforms continues to attract criticism in Germany, despite a considerable reduction in short- and long-term unemployment. This reduction of some claims of success for the Hartz reforms. Others say the actual unemployment figures are not comparable because many people work part-time or are not included in the statistics for other reasons, such as the number of children in Hartz IV household, which has risen to record numbers.

About 7 million people get Hartz IV benefits, of which 2.2 million are unemployed. [3] The budget is estimated to be 20 bn euro. [4]

The Hartz IV reforms form one of the main foundations of Germany’s subsequent economic boom. [5]

Cultural impact

ALTHOUGH the official term for long-term unemployment benefits is still Arbeitslosengeld II , Most Germans, Even news programs and politicians in parliament, Refer to it as Hartz IV . The term was voted German Word of the Year2004 by the Society for the German Language . [6] Earlier, in 2002, the term Ich-AG (another Hartz measure, see above) had been chosen by the German A-Word of the Year by a jury of linguistic scholars.

Meanwhile, Hartz IV has become a synonym for the class of non-working poor and is used as a prefix in multiple contexts (ie low-brow daytime television programs are called „Hartz IV TV“ by critics).

See also

  • Monday demonstrations, 2004
  • Working opportunities with additional expenses compensation
  • Arbeitslosengeld II – Leistungen zum Lebensunterhalt , the German social services and unemployment software-system
  • Universal Credit
  • Inge Hannemann


  1. Jump up^ (in German) „Regierung will Arbeitslosengeld II-Regelsatz erhöhen“(Government to Expand Unemployment Benefits),Focus(13 September 2012). Retrieved 02.08.2016.
  2. Jump up^ Text of Social Code (SGB) Second Book – Basic security for job seekers – (Article 1 of the Law of 24 December 2003, Federal Law Gazette I p 2954)(inGerman)
  3. Jump up^ (in French) „How much does RSA cost?“ , Observatory of Waste (02.06.2014). Retrieved 02.08.2016.
  4. Jump up^ (in German) „Hartz IV Kostensteigerung: Medienfalschberichte“, www.gegen-hartz.de (06.10.2014). Retrieved 02.08.2016.
  5. Jump up^ JC (15 October 2017). „How to keep small and marginal populists“ . The Economist .
  6. Jump up^ (in German) „Ein Jahr, ein (Un-) Wort!“,(One year, one (non) word), Spiegel Online (31.10.2011). Retrieved 02.08.2016.