"Hartz IV" will become citizens' income: That is certain after the Bundestag and Bundesrat approved the result found in the mediation committee with a large majority on Friday.

In addition to the government factions SPD, Greens and FDP, the Union also voted for it in the Bundestag, and the Bundesrat then approved the law after an unusually long debate.

But what is changing in basic security, apart from the name?

Is it really a system change, as the SPD claims?

And what will become of the principle of promoting and challenging?

Britta Beeger

Editor in business and responsible for "The Lounge".

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Manfred Schäfers

Business correspondent in Berlin.

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One thing is clear: the broad approval masks how differently the reform is assessed.

The first parliamentary director of the SPD parliamentary group, Katja Mast, spoke of the largest social reform in decades: "Hartz IV is history." Her colleague from the Union faction, Thorsten Frei, countered that pressure from the CDU and CSU on the basic principle of demanding and promoting.

The deputy chairwoman of the left faction, Gesine Lötzsch, decided that the core of the Hartz IV system would be retained.

The truth probably lies somewhere in the middle: there are some changes in the basic social security system, but it is not a question of a system change.

Here is an overview of the most important innovations.

Training before temporary job

A major goal of the reform is to get people into work in the long term.

Therefore, among other things, the so-called placement priority is abolished: instead of placing the unemployed as quickly as possible in the next best temporary job, professional training should play a greater role in the future.

Admittedly, the mediation priority in basic security was never as explicit as it sometimes sounded recently.

However, the Citizens' Allowance Act now explicitly emphasizes that the aim is to permanently overcome the need for help.

If a recipient of citizenship benefit does not have a vocational qualification - this applies to two-thirds of the long-term unemployed today - the job centers should therefore particularly consider placement in an apprenticeship.

At the same time, the reform creates stronger financial incentives for the long-term unemployed,

catch up on vocational training: with a monthly training allowance of 150 euros.

In addition, they will have up to three years to do this instead of two.

(More) work should pay off

The additional income should pay off for the recipients of the basic allowance, not least for young people, so that they learn that it is worth making an effort and doing something.

The income allowances for pupils, students and trainees will be increased in mid-2023 to the current mini-job limit of 520 euros.

This also applies to the three months between school and the start of training.

This limit does not apply during the holidays, so students can earn unlimited additional money.

But not only for them the incentives are increased.

Anyone who earns between 520 and 1000 euros as a citizen benefit recipient should be allowed to keep 30 percent of it - previously it was only 20 percent.

Voluntary commitment is also strengthened.

Volunteers can keep up to 3000 euros of the expense allowance from next year.

A more trusting cooperation with the beneficiaries

The Citizen Benefits Act clearly aims to give the basic security a friendlier face and to create a basis for trusting cooperation between the employees in the job centers and the recipients of the Citizen Benefits.

The originally planned six-month "period of trust" (see next point)

is canceled after the Union's fierce criticism .

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The previous integration agreement, which stipulates, for example, how many applications an unemployed person should write, will be replaced by a "cooperation plan": This should be drawn up jointly by the employment agency and the recipient of help, written in understandable language and contain no instructions on legal consequences.

Dealing with each other should also be "at eye level", according to the law, although job center representatives doubt that this is even possible in practice.