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Germany

Coalition Vows to Crack Down on Welfare Abuse

In their coalition talks, the Christian Democrats (CDU) and Social Democrats (SPD) have agreed to get tough on abuse of Germany's reformed unemployment regulations, known as Hartz IV.

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The coalition could be calling. Make sure you are where you say you are

The cost of Germany's labor market reform is almost double the amount originally planned -- 26 billion instead of the estimated 14 billion euros. SPD head Franz Müntefering said the hike could partly be attributed to the fact that local authorities transferred more of the old system's welfare recipients into the new Hartz IV unemployment benefit scheme than expected.

But politicians are also lashing out at benefit cheats, announcing plans to step up controls on fraudulent claims. The discussion has taken on a virulent tone, with a report posted on the economics and labor ministry's Web site indirectly comparing welfare recipients to parasites. The report contains a detailed list of real life examples of benefit cheats, referring to them as "freeloaders" and "spongers."

Arbeitslosenzahl Wolfgang Clement

Wolfgang Clement's ministry indirectly compared people on benefit to parasites

Peter Clever, the deputy head of the board of directors for the federal labor office told broadcaster Deutschlandfunk that, in random telephone checks since July on 390,000 Hartz IV recipients, 170,000 could not be reached, despite 10 phone calls being made at different times of the day and different days of the week. "You'd have to be really naïve to believe that all 170,000 people happened to be in job interviews at the time," Clever said.

The economics and labor ministry said it intends to step up telephone checks as well as other forms of control in the future. A spokeswoman from the ministry said that welfare recipients have a duty to cooperate with their local authorities and must be available for consultation.

Housing benefit open to fraud

Logo der Agentur für Arbeit Arbeitslosigkeit p178

State subsidized housing has been identified as a major area open to abuse

Experts say that subsidized housing under Hartz IV is one of the biggest sources of welfare abuse. A long-term unemployed person on welfare support can have an "appropriate" apartment (for example, up to 50 square meters of living space for a single person or 70 square meters for two people) including heat and electricity, completely paid for by the state.

The problem is that many welfare recipients are moving into these "appropriate" apartments on paper only. For that reason, housing benefit should only be paid to young adults living alone if their parents' income is insufficient, the director of the German association of local authorities, Gerd Landsberg, told the Osnabrücker Zeitung. Young people who qualify as long-term unemployed should be required to prove that they need their own apartment in order to take up job training or other qualification measures, Landsberg said.

Politicians are now calling for further reforms to Hartz IV in order to cut back on the number of households claiming state-subsidized housing.

Interest groups, charities outraged

An Internet forum for the unemployed (Erwerbslosen Forum Deutschland) has reacted angrily to the accusations made by the labor ministry, claiming it is looking for a scapegoat to draw attention away from its past failure to clamp down on welfare fraud.

Germany's main social and charitable organizations also protested against accusations of welfare abuse, saying the cost of labor market reform was set at an unreasonably low level to begin with.

"It's an attempt to lay the blame for persistent labor market misery at the door of those affected by it," said Georg Cremer, general secretary of the German Caritas association.

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