Germany: Hartz IV welfare legislation ruled unconstitutional

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Germany: Hartz IV welfare legislation ruled unconstitutional
By Dietmar Henning
18 February 2010

On February 9, the German Constitutional Court (BVG) in Karlsruhe
declared that the current welfare calculation rules for adults and
children are unconstitutional. That does not mean, however, that the
long-term unemployed and their families in Germany can hope to get
more money.

The nation’s highest court pointed to the “lack of transparency” in
benefit payment calculations, and ordered a revision of the system by
the end of the year. Large numbers of families have appealed against
the current system of payments because it is haphazard and results in
benefits that are far to low to cover even the minimum costs of living
that are supposedly guaranteed by the German constitution.

However, the High Court agreed only with the first point of the
complaint, namely the question of how the rates are justified and
calculated. “The shortfall in constitutionality arises in the legality
of the approach to the interpretation of the regulations,” said High
Court President and Chief Senate Magistrate Hans-Jürgen Papier in his
judgement address. But he did not give any exact figure for a minimum
living income. Instead he insisted it was for “the lawmakers,” i.e.,
parliament, to establish this level.

The estimation of these levels, he went on to say, “should be
justified on the basis of sound empirical evidence, as opposed to the
random arbitrary estimates that run contrary to realistic judicial
inquiry.” The reality, however, is that these “random arbitrary
estimates” were deliberately instituted by the former Social
Democratic-Green Party coalition government led by Gerhard Schröder
(Social Democratic Party, SPD).The aim of the Schröder coalition was
clear: to drastically reduce benefits for the unemployed. The SPD and
the Greens presented this policy euphemistically as an “incentive to
seek work.”

When the Hartz IV welfare payment scheme was introduced five years
ago, the unemployment benefit rate of €345 per month was based on
official national spot-samples of income and consumption. These
measured the average spending of single persons in the lowest 25
percent of the income scale. The paltry amounts were then further
reduced, on a purely arbitrary basis.

For example, the amount for essential groceries was reduced by 4
percent, health care costs by 9 percent, and the “culture and leisure”
allowance by 45 percent! In addition, all payments for electricity,
private transport and so-called “luxury articles” such as “glider
planes” (!) were completely withdrawn. We can safely assume that
low-paid workers—hairdressers, shop assistants, cleaners, care
workers, etc.—are unlikely to be in the possession of “glider planes.”

Because the national spot-surveys are conducted every five years, the
Schröder government ignored indicators of the rising cost of living
and instead used pension levels as the yardstick for justifying income
support levels. But there is no connection between the two. “The
current calculation formula works only to the advantage of the
national treasury,” wrote the Frankfurter Rundschau, “because most
pensions do not usually increase by much.”

What the High Court has completely rejected in its ruling is the Hartz
IV justification for the calculation of child benefits. These are
simply based on the amount for adults, that is, young people get 80
percent of the adult rate and children under 14 get 60 percent. This
leads to the absurd result that small children and babies get €11,90
for tobacco and alcohol, but nothing for nappies! In addition, they
have an allowance of just 62 cents for toys and €3.83 for cinema and
theatre visits.

Allowances for education, sport and music were completely removed from
the calculations. Furthermore, “exceptional hardship cases,” such as
chronic illness, or situations where separated parents live a long way
from each other and therefore have to pay higher travel costs to visit
their children, are no longer recognized in the Hartz IV regulations.
The High Court also criticized this aspect.

According to the Constitutional Court, the principle of basing
calculations on the income and consumption spot-sample data does not
in itself violate the basic constitutional laws, but the arbitrary
nature of their interpretation does. The gist of the ruling by the
Constitutional Court is not that welfare payments are necessarily too
low, but rather that the means of estimating payment levels is
insufficiently transparent.

A number of politicians have used the discussion surrounding the
ruling by the constitutional court to go onto an offensive against
welfare payments in general. The leader of the Free Democratic Party
(FDP), Guido Westerwelle, expressed his vehement opposition to the BVG
judgement, declaring that the ruling was “socialistic.”

Westerwelle is the current German foreign minister and the FDP is a
partner in the coalition government led by Chancellor Angela Merkel
(Christian Democratic Union, CDU). A leading member of the CDU, Hesse
State Premier Roland Koch, had already denounced the existing welfare
regulations. Other party members, such as the chairman of the CDU
employees group in the German parliament, Peter Weiß, have insisted
that any reform to the existing system under the CDU should not lead
to any increase in payments.

Amongst those warning against any increase in the miserly Hartz IV
payments was the Social Democratic mayor for the Berlin district of
Neukölln, Heinz Buschkowsky. Neukölln is one of the poorest districts
in Berlin and has a large proportion of immigrants living in poverty.
On a number of occasions Buschowsky has hit the headlines with his
demagogic denunciations of the unemployed and the poor.

While the judgement by the BVG will do nothing to improve the
situation for the millions dependent on Hartz IV payments, the court
ruling does point to the absolutely criminal nature of the legislation
introduced by the Schröder government. Far from assisting in the
creation of new employment prospects, the SPD-Green Party legislation
was crucial in establishing a huge pool of cheap wage labourers in
Germany.

In this respect, the legislation was highly successful. According to
official figures, 1.2 million of the total of 6.7 million recipients
of Hartz IV payments are employed—300,000 of them working full-time.
Furthermore, this huge pool of the working poor is consciously used by
employers to depress the wages of all German workers. This is the
devastating social balance sheet of the SPD-Green coalition that
governed between 1998 and 2005.

http://wsws.org/articles/2010/feb2010/hart-f18.shtml

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