Basic alimony: when work is less profitable

DThe Traffic Light parties have undertaken many social policy projects as part of their coalition agreement. This also includes a plan to improve operational efficiency. Tax-financed social benefits will be designed to “achieve the most favorable effect in terms of employment impact and labor market participation in employment, taking into account social insurance contributions,” the report says. However, the controversial basic child safety provision in its previously planned form would have had the opposite effect. This is evidenced by calculations by the Ifo Institute and the Center for European Economic Research (ZEW), the results of which are available to FAZ.

As researchers from the two institutes jointly determined, “an overall moderate decline in labor supply” can be expected as a result of this reform project. In particular, based on simulation calculations, they conclude that in the worst case, the labor market could lose about 70,000 so-called full-time equivalents as working parents in the future, on top of receiving basic child benefits. , will either work less than before or give up work entirely. This is especially true for single parents. These are the results of a model calculating the impact of social benefits on job supply, on the basis of which the two institutes also prepared a major report for the Federal Ministry of Labor last year.

In addition to the direct additional costs of the new social benefit, this also leads to an indirect additional burden on the state treasury. “Reduced labor supply translates into higher fiscal costs as reduced employment leads to lower tax and social security revenues and higher transfer payments,” said the nine-page document, billed as an “assessment.” In particular, they calculated up to 2.3 billion euros annually, about 40 percent of which is likely to be reflected in lost social security income.

“It’s not fully developed in many places.”

As part of the Traffic Light alliance, the FDP believes that its now very critical position towards the government bill will be strengthened. “The fragments of basic child safety that still exist are simply unrealistic,” criticizes its secretary-general Bijan Jir-Saray. “Family Minister Paus’s proposal is in many places not fully developed and does not reflect what was agreed in the coalition agreement,” he told FAZ. Instead, there are now “signs that her concept could prove fatal to work incentives.” However, this is “the last thing we need, given the shortage of jobs and skilled workers,” the FDP general secretary said.

Along with basic provision for children, it is necessary to reconsider the structure of child benefits and, in particular, the so-called child benefit for persons with low incomes. For the estimated 2 million children from families receiving benefits, the bill would mean that in the future they would receive ongoing cash benefits for living expenses through a different agency than their parents. While adults continue to receive them from the employment center, the family fund will be responsible for the children. Possible special needs of children will also have to be submitted to the employment center in the future. The system of enrollment and offset of income in benefit families of citizens will become more complicated.

Criticism of the project is also based on the administrative structure associated with it. Family Minister Lisa Paus (Greens) recently announced that 5,000 new staff positions will be needed to equip family funds in the organizational area of ​​the Federal Employment Agency. This is “reducing bureaucracy for citizens,” she argued. The Federal Employment Agency initially expected that its administration would require an additional 3,578 full-time equivalent workers. The FDP calls the 5,000 jobs “illusory.”

Criticism also comes from the SPD.

Unlike the usual socio-political conflicts between traffic light parties, this time the FDP is not alone in the coalition with its criticism. Martin Rosemann, spokesman for the SPD parliamentary group for labor market policy, made this clear on Thursday, defending the Liberals in this regard. “I don’t share the accusation that the FDP is still dragging its feet on the process and that’s why everything is being delayed now,” Rosemann told Deutschlandfunk. The bill passed by the federal cabinet “unfortunately has many weaknesses that we have to address together in the parliamentary process,” he explained.

In addition to similar problems with Paus’ specific bill, the FDP had already formulated another condition in early October, shortly after the cabinet decision – with reference to another agreement in the coalition agreement. She called for basic child safety to be included in the overall concept of strengthening work incentives for those receiving social benefits, especially those receiving civic benefits. At the moment there are no concrete proposals from Labor Minister Hubertus Heil (SPD).

Stefan Stracke (CSU), EU representative for labor market policy in the Bundestag, is also critical of this. “More incentives are needed to get to work or to work more,” he warned on Thursday in the direction of traffic lights. But instead Heil allowed reform proposals put forward by the Ifo and ZEW institutes to “disappear in a drawer,” he criticized.