Hartz IV recipients have certain obligations to meet, for example, the need to keep appointments at the job center or to show evidence of looking for work. Failure to meet the conditions might see their benefits cut via "sanctions."
For the next three years, the activist organization Sanktionsfrei ("Sanctions-Free") will automatically reimburse any sanctions imposed on the 250 test recipients. Effectively, they will be guaranteed a basic income of €416 every month.
Strictly speaking, this endeavor, labeled "HartzPlus" is not a Universal Basic Income (UBI) experiment. For starters, it is backed by a private organization and is not supported by the German government.
Yet it can be seen as being on the spectrum of a UBI movement that has grown in both prominence and visibility in recent years.
Several left-leaning politicians have supported the idea. Even Hillary Clinton, not exactly a socialist by definition, said she gave the notion of standing on a UBI platform serious consideration ahead of her bid for the US presidency in 2016.
For Daniel Feher, the Berlin-based chairman of Unconditional Basic Income Europe (UBIE), a group which campaigns for basic income policies across Europe, the HartzPlus experiment is another positive example of how the question has pushed itself into the mainstream.
"I think it [HartzPlus] is a basic income experiment in the sense that it changes the situation of the people who would receive it from being in a very precarious situation, with the full pressure of bureaucracy on them, to a situation where they can rely on a certain income for a period of time," he told DW.
"It will be very interesting to see what kind of impact this has on their lives."
Face to face: Basic income for all?
However, some observers of HartzPlus have pointed out that it is not a UBI as it is not paid if the person finds a job which pays more than the welfare claim.
Hilmar Schneider, the chief executive officer of the IZA Institute of Labor Economics, says that in addition to that, HartzPlus only works if those receiving the compensation do not declare it as income to their local employment agency because if they would, it would be treated like any other source of non-welfare income, and the welfare claim would be lowered accordingly.
"HartzPlus is best regarded as a political instrument to protest against what especially left-wing supporters perceive as the 'stick and carrot' practices of the employment agencies," he told DW.
Helena Steinhaus, head of Sanktionsfrei, told DW that while participants don't receive financial assistance if they have a job, they can still remain part of the study and have any Hartz IV sanctions reimbursed in the future should they end up back on benefits.
"They are scared of losing their job or they are freelancing and have no financial stability and are under the constant threat of falling back into Hartz IV," she said.
Growing in prominence, but not yet tested
The topic of basic income in Germany is not new, but a focus on the unconditional, universal element has increased since the last major labor market reforms were introduced in 2003.
Although not quite an UBI experiment in the same vein as the Finnish one, the results of HartzPlus will be closely watched to see if they mirror those announced in Finland earlier this month.
The Finnish government opted not to extend the trial beyond a two-year period and will now explore other welfare models instead. The first batch of results, made public in recent weeks, suggested that the provision of a guaranteed basic income did not have an effect on the labor market and did not increase the likelihood of recipients finding work.
Feher says that those results should be treated "cautiously" as the trial had "a very particular design that changed a lot from the original proposal to what the government finally implemented."
Daniel Feher says that organizations such as the UBIE do not advocate specific funding models, but rather want to promote the topic of UBI as one worthy of wider political debate. However, it is his personal view that in order for universal basic income policies to be sustainable, it would require a fundamental restribution of wealth through taxation policies.
For Hilmar Schneider, the idea is pie in the sky. "I doubt people would continue supporting a UBI if they know how much they would have to pay for it," he says.
He says the idea of such a payment being universal is one of its biggest flaws. "In order to save income for potentially 15-20 percent of the population one has to subsidize 100 percent of the population in an equal manner, although 80-85 percent are not in need. It means that one would need five to six times more money for targeting the poor than necessary."
He also believes that predictions of an automation-fueled jobs cataclysm have been exaggerated, and that the provision of a UBI would make low-paid jobs less attractive, leading to price increases and a general lowering of the standard of living, without a reduction in poverty.