Citizen’s Income: the second stage of the reform will start on 1 July 2023

Numerous crucial regulations for the Citizen’s Income will come into force in summer 2023. In particular, the integration process and issues relating to further education and training will be further developed. Other changes include additional instruments such as holistic support and the jointly created cooperation plan, which support trusting cooperation “on equal terms”. There will also be an increase in tax allowances for employed people.

29 Jun 2023 | Press release no.31

The Citizen’s Income was introduced on 1 January 2023. In a first step, the normal requirement was increased at the beginning of the year and so-called waiting periods were introduced for housing and assets. With the second phase of the Citizen’s Income, the funding opportunities and the toolbox of the Federal Employment Agency (BA) will be larger and more individual as of 1 July 2023. More funding opportunities for further training courses, more motivation through financial incentives with the further training allowance and the Citizen’s Income bonus show a clear focus on education and sustainability of placement.

Daniel Terzenbach, Director, Regions, at the Federal Employment Agency (BA), explains: “Citizen’s Income is more than just a name change. It is an important reform, drawing on our experience from the last 17 years. The toolbox will be larger and cater more individually to people’s life situations. We now have more funding opportunities for further training and can support people with the new holistic assistance. The main thread running through the project will be the cooperation plan, in simple and comprehensible language. The sustainability of labour market integration is thus taking priority over fast-track placement.”

The most important changes as of 01 July 2023:

The further training allowance of 150 euros per month for participation in training for vocational qualifications and the Citizen’s Income bonus of 75 euros for participation in measures that are of particular importance for sustainable integration motivate people to qualify.
Retraining courses will no longer have to be shortened, but may instead be supported for their whole duration under certain conditions. 
Customers work together with the Job Centre to develop a cooperation plan instead of the previous integration agreement. The new cooperation plan is legally non-binding and focuses on cooperation based on trust and partnership. It serves as a common roadmap and concisely summarises the objective on the labour or training market and the steps that need to be taken to achieve it, at a glance and in comprehensible language.
A mediation procedure can help in the event of disagreements in the preparation or continuation of the cooperation plan.
Citizen’s Income recipients with additional income receive significantly higher tax allowances. 
Customers with special individual problems (e.g. financial, health or family) can be supported voluntarily with holistic care. This can also be done on a visiting basis, depending on the customer’s wishes and requirements.
Background SGB II
In May 2023, 5,490,000 people in Germany received benefits according to Book II of the German Social Security Code (SGB II). Almost three quarters of those eligible for standard benefits were able to work (3,919,000). Of these, 1,714,000 were unemployed. 1,570,000 counted as persons entitled to benefits who were not currently capable of working. Persons entitled to benefits who are not currently capable of working are especially children under 15 years of age. 
The Citizen’s Income is paid out by the job centres. The job centres also provide support in the search for jobs and apprenticeships, and help people to enter and re-enter employment with new qualifications and further training. 
Source: https://statistik.arbeitsagentur.de/SiteGlobals/Forms/Suche/Einzelheftsuche_Formular.html?nn=627730&topic_f=multi-eckwerte