The citizens’ income analysis shows whether it still pays to work in Germany

FOCUS online calculates 8 scenarios: The basic income analysis shows whether it is still worthwhile to work in Germany

The federal government will replace Hartz IV with Citizens Income from the new year and raise standard rates significantly. Critics complain that it is no longer worth working with. FOCUS online has therefore converted – look at our example and tell us about your own experiences.

The one with one Links marked with a symbol or underline are affiliate links. If a purchase is made, we receive one commission – at no extra cost to you! More info

What will change with the citizen’s money?

In purely economic terms, the conversion of Hartz IV to citizen income from 1 January will result in a significant increase in the income of the unemployed. The standard rate for an adult increases from 449 to 502 euros, for children it increases from 324 to 362 euros on average. There are also a number of bureaucratic simplifications. Citizens’ income recipients will in the future be able to earn more money on the side without risking a drop in their standard rates. The limit above which savings are counted will also be raised significantly. In addition, recipients of citizen’s income can stay in their current home for two years. The state covers the rental costs, even if the apartment is actually too big.

Exciting, but no time right now?

What is the criticism?

“With the citizen subsidy, unemployment will be much more attractive,” says Carsten Linnemann, deputy chairman of the CDU. The Craftsmen’s Association follows the same line. “At the lower end, the boundaries between ordinary work and basic income are becoming more and more blurred,” says Hans Peter Wollseifer, chairman of the Central Association of German Crafts and Trade (ZDH), to the Rheinische Post, “this will mean that more people than before will be able to do this. Not working pays more than working.”

The criticism is triggered by the fact that recipients of citizen’s income are paid rent, heating costs and the radio license in addition to the standard rates. So the actual earnings are far higher than the standard rates.

What do you think about citizen money?

Borgerpengen replaces Hartz IV. A decision that makes many economists sick to their stomachs. For people on low incomes, it is hardly better than those who do not work at all.

What do you think about citizen money? Is the work still worthwhile for you personally? Tell us about your living situation, also with a view to the increased energy costs.

Write us a message about this my-report@focus.de, Please include your name and phone number so we can contact you if we have any questions. We would like to publish some of the statements by name.

Do Citizens Income recipients actually get more money than working people?

We compared the financial balances of employees and recipients of citizenship income in eight scenarios. Individuals, single parents with one child, couples without children and couples with two children were considered. In the first comparison, all of these people work in a full-time, minimum-wage job, where one parent stays at home with the family. In the second comparison, all adults have a full-time job whose gross salary is 2,500 euros per month, slightly above the minimum wage, but well below the national average of around 4,100 euros.

Result: In seven of the eight scenarios we calculated, workers are better off financially than recipients of citizen income. Only in the extreme scenario of a family of four living on minimum wage is it more worthwhile to collect the citizen’s income. In this case, however, the state would provide additional assistance, such as housing allowance.

The Comprehensive Crisis Preparedness Checklist: How to Protect Your Assets (Ad)

How does this result occur?

Citizens’ income will be introduced on 1 January 2023. From this date, however, a few other things will change. Social contributions, such as the additional contribution to health insurance and the contribution to pension insurance, will increase slightly. With the Inflation Compensation Act, the calculation of income tax is also changed in favor of employees: the basic deduction increases by around 300 euros to 10,632 euros. The standard tariff values ​​for calculating income tax are also changed, the child benefit increases by EUR 18 per child to EUR 237, and the child benefit will increase by EUR 70 to EUR 2880 per child and parent. Overall, this leads to significant relief, but only for people who work. Citizen benefit recipients pay no tax and receive neither tax deductions nor child benefit.

In which case does the citizen’s income still exceed the salary?

In purely financial terms, the citizen’s allowance can only pay off if you have a very low income – i.e. at best the minimum wage – and must cover high costs for rent and heating. This may be the case because, as in our sample calculation, you have to pay for a large apartment for a family, but also because you live in an expensive city like Munich or have a gas contract that is well above average.

There is, however, a ceiling on the government subsidies for rents from the citizens’ income recipients. A maximum of 50 square meters is taken over for one person, 65 square meters for two people and 95 square meters for four people. In our calculation, we have used the national average rents for apartments of this size. In the first two years of citizen income, larger apartments are also paid for.

In that case, should I quit my job and lie down on the couch?

Anyone who comes to the conclusion that he would be financially better off with the citizen’s income than with his current job could of course come up with this idea. Four reasons argue against it:

1. Citizen’s income is a so-called subordinate social benefit. This means that you can only apply for it if you have already used up other social benefits. It includes daily allowance, all forms of housing allowance and subsidy, child allowance, child allowance, sickness allowance, maternity allowance and parental allowance. In many cases, the employment service will reject your application for this reason alone.

2. You can’t just quit your job and get citizenship. Anyone who needs help because they have resigned or lost their job due to criminal conduct must justify this to the employment service and may be subject to sanctions. Services can be reduced by a maximum of 30 percent.

3. You can’t just lie on the sofa and collect money with the citizen’s income. Benefit recipients also have responsibilities. You must prove that you are actively trying to find a new job, reasonable jobs that the temp agency offers you, or that you participate in education and further training initiatives that the temp agency organizes for you.

4. Citizen benefit recipients do not pay into the pension fund. Each year in which you collect the citizen’s income reduces your later pension payments. And they can occur earlier than in working people. The employment service can force recipients of citizen’s benefit to retire when they reach the age of 63.

How to apply correctly!

Our guide shows you how you can present yourself as best as possible and score points in your application.

So why do so many criticize that basic income invites people to “not work”?

Craftsman President Wollseifer is right when he says that because of the basic income, the lines between working and non-working people are blurring more than before. After all, basic income raises the incomes of the poorest in society, while the incomes of working people remain the same.

What do you think about citizen money?

Borgerpengen replaces Hartz IV. A decision that makes many economists sick to their stomachs. For people on low incomes, it is hardly better than those who do not work at all.

What do you think about the citizen’s money? Is the work still worthwhile for you personally? Tell us about your living situation, also with a view to the increased energy costs.

Write us a message about this my-report@focus.de, Please include your name and phone number so we can contact you if we have any questions. We would like to publish some of the statements by name.

However, it is doubtful to draw the conclusion that the citizen’s income is too high. “In sectors where the difference between labor income and citizen income is no longer maintained, there is an urgent need for improvements,” Verena Bentele, chairwoman of the VdK social association, told Deutschlandfunk. You want to say: It is not the citizen’s income that is too high, but rather the wages in some sectors that are too low.

Stefan Körzell of the board of the German trade union DGB also finds Wollseifer’s assumption that non-work will be worth more to some than work in the future “cynical”, as he tells Tagesschau. “Not a single employee has a penny more in their wallet because the planned introduction of citizen’s income is intended to raise the standard rates slightly.” Ralf Kutzner, board member of IG Metall, argues in the same vein: “Many craft entrepreneurs have recognized that ordinary work clearly needs to be paid better. Herr Wollseifer is obviously not one of them,” he told dpa.

Economists even criticize that the basic income is still too low. “It is not enough in the first place,” said Marcel Fratzscher, chairman of the German Institute for Economic Research, WDR. The Social Association of Germany sees it the same way. He calls for a standard rate of 650 euros from 1 January.

Follow the author on Facebook

Follow the author on Twitter

In the video:

How to find the best call money and fixed deposits now

Star doctor reveals “absolute insider tip” against colds

csa

Leave a Comment