If it is up to social organizations and social politicians, then the plans of Labor Minister Hubertus Heil (SPD) for a new basic income as a replacement for Hartz IV have one major flaw: the monthly cash benefits for transfer recipients will not be increased to the extent they want.

The Paritätische Wohlfahrtsverband criticized Heil's proposal as "inconsistent" and demanded a standard rate of 678 euros per month for adults living alone.

That would be 229 euros or 51 percent more than today.

In addition to the cash benefit, the job centers already pay the recipients an apartment including heating costs.

Dietrich Creutzburg

Business correspondent in Berlin.

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"What matters is what people have in their wallets at the end of the day," explained Werner Hesse, Managing Director of the association.

Anyone who wants “poverty-proof citizen income” must increase the standard rate by “at least 50 percent”.

The Diakonie reacted similarly.

Heil have "left out the central question of the amount of the standard rates".

The SPD chairwoman Saskia Esken was a little more reserved: she used the agreed minimum wage increase to 12 euros as a benchmark, which corresponds to an increase of 25 percent compared to the previous year.

"Like the minimum wage, the standard rates for basic security must also rise sharply," she told the "Redaktionsnetzwerk Deutschland".

Heil thinks that's not enough

So far, however, it is not only unclear how a political majority could be found for it.

No fundamental reassessment of the standard rates has been agreed in the coalition agreement between the SPD, the Greens and the FDP: the FDP is also opposed to this for labor market policy reasons, because it primarily wants to make it easier for benefit recipients to start work.

At the same time, however, the question arises as to how something like this should be financed, because the federal budget would quickly be burdened with additional annual costs in the tens of billions.

An impression of this is given by calculations published by the Leibniz Center for European Economic Research (ZEW) in 2021 as part of a report for the Greens: A standard rate that was 50 euros a month higher led to an additional budget burden of up to 18 billion euros a year .

A standard rate that is 100 euros higher would result in additional expenditure and reduced income of up to 31 billion euros a year.

And as an extreme variant, the researchers then calculated a standard rate increase of 171 euros per month, in accordance with a demand from the Greens.

It was estimated at up to 49 billion euros.

The amounts are significantly higher than one might assume if one transfers the respective increases to the current unemployment benefit II budget of 21 billion euros per year.

There are two main reasons for this: On the one hand, the basic tax allowance is linked to the amount of the basic social security and would then have to increase accordingly - which leads to a considerable drop in tax revenue, which, according to the calculations, accounts for about half of the additional burden determined.

On the other hand, the circle of those entitled to transfer grows with every increase in the standard rate;

and this may then tempt hundreds of thousands of workers to work less because it pays less.

Leaving aside this effect, according to the ZEW calculation, a standard rate increase of 50 euros costs a total of 8.6 billion euros, of which 4

According to the current legal situation, the standard rate should increase by around 20 euros per month on January 1, 2023.

The increase is calculated from the increase in wages and prices in the period from July 2021 to June 2022. Labor Minister Heil also believes that this is not enough.

He therefore wants to introduce a new calculation method with his legislative package that will lead to higher cash benefits.

Since the coalition has not yet agreed on this, he initially only announced that he would submit a concrete proposal in September.