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Germany

Unemployment fraud on eBay?

Germany's employment agency wants to monitor welfare recipients' e-commerce activities - amid suspicions that some earn more than allowed through online trade. Data protection authorities and welfare groups say "no."

Anna Salmen is standing behind the bar of her association's café in the German town of Wuppertal. She's angry. Her association, Tacheles e.V., has gained national fame in Germany for promoting the rights of Germans who receive welfare benefits, the so-called "Hartz IV" payments.

"The plan is complete and utter nonsense," she tells DW. During her time as an advisor at Tacheles, none of the welfare recipients she has met has ever tried to enrich themselves financially - by setting up commercial profiles on the internet portal eBay, for example. Salmen rejects plans to step up surveillance on them.

Under the Hartz rules introduced by Chancellor Gerhard Schroeder coalition government in 2002, the welfare state in Germany no longer safeguards people's standard of living but merely their living expenses. Long-term unemployed no longer receive state benefits according to their previous wages but according to their needs.

Branch of the German Federal Employment Agency (Photo: Sebastian Willnow/dapd)

The Federal Employment Agency wants to stop fraud

Germany's Federal Employment Agency (BA), which is behind the latest plans to more closely monitor welfare recipients, says it's merely trying to make sure that it's not paying too much.

"It's in the interest of taxpayers that welfare benefits aren't obtained fraudulently. It's their money, after all," said the BA's spokeswoman, Ilona Mirtsin.

Under the new BA plan, recipients of unemployment or other social benefits who earn some money in online trading would be monitored more closely. The plan was developed in a working group consisting of representatives from the government, the German federal states and other umbrella organizations. When Germany's mass-circulation Bild newspaper published the plans, they caused an outcry.

An excessive ten million euros

The working group intends to present the plans to the new government coalition soon, after it is formed. "We expect to find that we're paying in excess of ten million euros in welfare benefits every year," said Mirtsin, adding that her agency could envisage cooperation with the Federal Central Tax Office (BZSt). The BZSt has already implemented its so-called Xpider program, which scans the Internet for companies liable for taxation. Xpider then passes on the data to the local tax offices. Germany's employment agency now wants to access that data.

Does that mean that soon all recipients of unemployment and social benefits payments will be put under general suspicion? No, said Mirtsin. "But it's a fact that there are people who commit benefit fraud. And it's our job to stop that."

But Anna Salmen from Tacheles still doesn't understand the plan. According to her, it's not necessary to monitor Hartz IV recipients online. "Anyone who claims benefits has to come clean anyway regarding the past three months," she says. Applicants have to lay out how they've lived during that period, and that includes eBay or Amazon sales. "Starting a monitoring program in addition to that is superfluous, and a waste of taxpayers' money."

Private sales

At anti-Hartz reform demonstration, a banner reads: Hartz IV (unemployment benefits) insults and makes sad. (AP Photo/Roberto Pfeil)

Hartz IV recipients are only allowed a very limited additional income

The Hartz IV rules also include what are called "protected assets." Every Hartz IV recipient is allowed to save up 150 euros per year of their lives for a rainy day. If you sell personal belongings on eBay, says Salmen, that is merely a transformation of material goods into money. Ilona Mirtsin from the employment agency BA agrees, but adds that that is not the point.

"We are not going to denounce anybody for selling their cupboard. It's about sources of commercial income," she said.

It's not clear, says Mirtsin, how many Hartz IV recipients actually do increase their income illegally with commercial deals online. But the BA often receives anonymous tip-offs. Mirtsin says that one option would be to have suspects present their bank statements to the BA. But she says her agency merely wants to access data which the Federal Central Tax Office collects anyway. The BA, in other words, doesn't intend to go on the hunt online for fraudsters itself.

Data doubts

Groups promoting the rights of unemployment and social benefits recipients aren't the only one vehemently opposed to the BA's suggestions.

Federal Data Protection Officer Peter Schaar is also sceptical, and he demands strict conditions for data collection. It's not an infringement on personal rights if the BA identifies a Hartz IV recipient as a commercial trader online as a result of a general scan of the internet, Schaar says, but it would not beacceptable at all to scan through social networks. Schaar agrees that the employment agency already has enough tools available to combat fraudulent benefits claims. That's why, thus far, the German states and the umbrella groups have rejected similar plans.

It's one of the reasons why the BA's Ilona Mirtsin warns of overestimating the plans. "We still don't have a government coalition, and the idea in that working group was one of more than one hundred."

So even if the suggestion is turned into a bill by the government at some point, it won't be easy for the employment agency to implement it.

"In that case, I would closely monitor the procedure from the very beginning," data protection chief Peter Schaar said.

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