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Welfare benefits

February 10, 2010

Germany's highest court on Tuesday declared unconstitutional the country's controversial social benefits known as Hartz IV. Millions of German families on welfare could now receive more assistance.

A woman looks at an information board at an employment agency
Jobless Germans have had a hard time with the new welfare lawsImage: AP

The Constitutional Court in Karlsruhe has ruled that a five-year-old social welfare program known as Hartz IV is unconstitutional.

The ruling means that the current benefits paid out to those who qualify, including child dependents, must be adjusted. At present, adults receive 359 euros ($495), and children, depending on their age, between 215 euros and 287 euros.

Court president Hans-Juergen Papier (middle) read out the ruling
The court ruled that welfare benefits are not 'transparent'Image: AP

The court gave lawmakers until the end of 2010 to come up with new guidelines for Germany's 6.7 million Hartz IV recipients. About 1.7 million children under the age of 14 are among those affected. The court said that the rules were not transparent enough and did not ensure at least a "dignified minimum" income.

The court's decision was well received by a number of politicians, including German family minister Kristina Koehler.

"With its verdict, the court has established clarity and at the same time has considered the actual experience of many families with children, who are dependent on Hartz IV," said Koehler in a press release. "It is important and right, since it guarantees that the needs of children in families dependent on state benefits are appropriately considered."

Until now, the needs of young children and teens up to the age of 18 were not calculated separately. Depending on their ages, dependents of adult recipients received between 60 percent and 80 percent of what the parent or legal guardian received.

New rules could cost billions

The Constitutional Court did not propose a methodology for recalculating the standard rates, but Hans-Juergen Papier, the president of Germany's Constitutional Court, said benefits must be based on "reliable figures" and "comprehensible calculations." Rough estimates are unconstitutional, Papier said.

Any adjustment upwards in social welfare expenditures is likely to cost taxpayers billions of euros and strain Germany's already hefty 100-billion-euro deficit.

However, German labor minister Ursula von der Leyen welcomed the court's verdict. "The ruling is non-negotiable and it is clear that society has to pay for this," she told NTV news channel.

Three families filed a lawsuit against the Hartz IV guidelines in 2005, arguing that the benefits for children were arbitrary and did not even cover minimum subsistence levels.

The case was first argued in two lower courts, which questioned the legality of the existing standard benefits, and asked the country's highest court for clarification.

The lawsuits and Tuesday's court's verdict were criticized by German interior minister Thomas de Maizière. The minister was quoted in German daily Bild after the ruling. "The verdict shows a problematic tendency toward an extreme case by case evaluation instead of a sensible lump sum payment," said de Maizière.

It remains to be seen whether calls by social welfare groups for a 500-euro monthly minimum for children will become a reality.

Editor: Chuck Penfold