Citizen’s Income to begin on 1st January 2023 – Ahuja: “The higher standard rate will be paid automatically”

On 1st January 2023, the Citizen’s Income is to replace Basic Income Support. This was decided today by the German Bundestag and Bundesrat. The Citizen’s Income is to be introduced in two steps. In the first step, the standard rate will be increased at the beginning of the year and a minimum claims limit will be introduced. In the second step, the key elements surrounding further training and qualification are set to be introduced mid-year.

25 Nov 2022 | Press release no.52

Vanessa Ahuja, Director of Benefit Payments, explains: “We now have clarity and can make a start. We will pay out the increased standard rates on schedule at the start of the new year. Recipients do not have to make a new application for the Citizen’s Allowance. Those who will continue to receive benefits from their job centre in the new year will be paid the higher standard rate automatically.”

The new minimum claims limit means that repayment claims no longer apply to amounts of up to 50 euros. If, for example, a recipient’s monthly income changes only slightly, until now, it has always been necessary for new decisions and to issue repayment claims for small amounts of money.

The other key elements of the Citizen’s Income are set to take effect in July. These will include, for example, the expanded availability of support and the Continuing Education Allowance. The new cooperation plan, which replaces the integration agreements, is also set to follow mid-year.

At the heart of the Citizen’s Income Act is providing people with better opportunities for support and qualification-based training. Vanessa Ahuja: “The Citizen’s Income remains an important reform which also incorporates the experiences we have gained over the last 17 years. In terms of the availability of support, our toolbox is getting bigger. More opportunities for continuing education, more motivation thanks to the new Continuing Education Allowance, and the abolition of the principle whereby placements are always prioritised over benefits, stand for a clear focus on education and long-term placements. We are now preparing for the new developments and training our colleagues accordingly.”

New standard rates, protected assets and tax-free allowances

On 1st January 2023, the standard rate is to increase to 502 euros for single persons and to 451 euros per partner for couples. For non-working adults under 25 who live in their parents’ home, the rate is increasing to 402 euros, for young people aged 14 to 17 to 420 euros, for children aged 6 to 13 to 348 euros, and for children aged under 6 to 318 euros.

In the future, the protected assets in the first year will total 40,000 euros for the applicant member of the dependent household and 15,000 euros for each additional person. In the first year, the job centres will also cover the full costs of the home. Following the end of the first year, the accommodation must be considered to be appropriate, however.

Due to the higher allowances, 30 percent of the benefits can be retained in the case of employment with an income of between 520 and 1,000 euros. Young people will keep their income from school and student jobs and income from an apprenticeship up to the mini-job threshold (at present, 520 euros). No income from student jobs during vacations is taken into account. 

Moratorium on sanctions to end in the new year

In the case of breaches of duty by recipients, the job centres will be required to issue reductions in benefits again as of January; therefore, the moratorium on sanctions will end in the new year. In the case of a failure to sign on, the reduction is 10 percent; for the other breaches of duty, the sanctions are staggered. They are 10 percent for one month for the first breach of duty, 20 percent for two months for a repeated breach of duty, and 30 percent for three months for a further breach of duty. Sanctions rarely occur. Last year, it was only necessary for 3.1 percent of benefit recipients to be sanctioned with at least one sanction.

The Citizen’s Income Act is yet to have been published.

Wichtig:Background SGB II
In October 2022, 5,331,000 people in 2,826,000 dependent households in Germany received benefits according to Book II of the German Social Security Code (SGB II). Some three-quarters of those eligible for standard benefits were able to work (3,790,000), 1,678,000 of whom were unemployed. 1,541,000 were persons entitled to benefits who are not currently capable of working. Persons entitled to benefits who are not currently capable of working are largely children under 15 years of age.
Basic income support and/or the Citizen’s Income from 2023, 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. 

Link at Jobcenter.digital (available in German)