The German government's planned overhaul of the controversial Hartz IV social benefits system has been halted as the reform fails to pass a Bundesrat-level vote.

Bürgergeld social benefits reforms halted at Bundesrat level

CDU / CSU members of the German parliament have blocked plans by the traffic-light coalition to overhaul parts of Germany’s social security payments system. After a vote in the Bundesrat on Monday, the coalition’s reform plan did not receive a majority of votes in the Länderkammer (States Chamber).

In the past weeks, the conservative CDU / CSU faction of the German parliament had announced that it would reject the government’s proposed reforms, which had already passed through the Bundestag.

In Germany, federal-level reforms must be passed through the Bundestag and Bundesrat before they can be signed into law by the federal president. Since the reform has been rejected, a mediation committee between the Bundestag and Bundesrat must now seek a compromise.

What are the benefits system Bürgergeld reforms?

By introducing a Bürgergeld (citizens’ income) the German government is planning to remove the controversial Hartz IV unemployment benefit (Arbeitslosengeld II) - which was implemented by the SPD back in 2002.

The government argue that reform would make Germany's unemployment support system more fair and encourage people who have lost their jobs to get back into work, rather than treating them harshly or even punishing them by cutting their benefits - a practice known as “sanctions” under the current system. Factions within the SPD have long been uneasy about this tough approach, which is considered by many to be at odds with the party’s philosophy of a caring welfare state.

SPD Labour Minister Hubertus Heil also intends to use the reform to soften Germany’s controversial sanctions system. Currently, anyone who fails to comply with the expectations set out for them by the job centre - for instance attending appointments or applying for jobs recommended to them - can have their unemployment benefits cut by up to 30 percent.

Under the reform now rejected by the Bundesrat, benefit recipients would be given a six-month “period of trust” when they first start receiving Bürgergeld. During this time, payments cannot be cut. After this grace period ends, sanctions will exist, but the culture surrounding them will be different: job centre appointments will still be compulsory - and sanctions will exist for people who repeatedly miss them - but they should be made more flexible and informal, and therefore easier to attend.