Germany’s constitutional court (Bundesverfassungsgericht), a two-chamber state body established in 1951 in the little town Karlsruhe, has recently made a milestone decision which will have significant impacts on the country’s well developed welfare system. The highest judges declared “Hartz IV”, a controversially discussed social welfare program introduced by the Social-Green coalition under Gerhard Schroder’s leadership (1998-2005), unconstitutional.
When Schroder and Joshka Fischer, former foreign minister and head of the coalition’s junior partner, took office in the late 1990s it was a groundbreaking change on Germany’s political stage that had been dominated by Helmut Kohl’s chancellorship and his Christian-liberal coalition for almost 16 years. Schroder promised to expand the state’s welfare services, but at the same time, without losing relation to reality, he warned Germans of hard times awaiting the country. The demographic shift and imbalance in Germany’s aging population would force the people to work harder, to increase benefits-related loan deductions and to waive on certain rights in the public health and social security sectors in order to keep the entire welfare systems “alive”. As a result of long-lasting parliamentary bargaining a “Hartz-Committee”, named after the head of the commission Peter Hartz, then Volkswagen’s personnel director, was founded in 2002. This commission developed a set of recommendations to reform German labour markets and devised thirteen “innovation modules” which were then put into practice as “Hartz I-IV”. The last reform package was voted in by the Federal Parliament (Bundestag) in late 2003 and by the Federal Council (Bundesrat) representing the 16 federal states in mid 2004. This part of the reform brought together the unemployment benefits for long-term unemployed and the welfare benefits, leaving them both at approximately the lover level of the latter (€ 359 per month for a single adult person and €215 to €287 for children, depending on their age).
The ruling of the constitutional court means that currently paid out benefits must be adjusted. Lawmakers have to come up with new guidelines for the country’s 6.7 million Hartz-IV-recipients, including about 1.7 million children under the age of 14. In their decision the judges, led by the court’s president Hans-Jurgen Papier, made clear that the current regulations were not transparent enough and that the needs of young children and teens up to the age of 18 should be calculated separately. Until now, dependents of adult recipients received between 60 and 80 percent of what the parent or legal guardian received. The court criticized the lack of a dignified minimum income under the current law and called on the lawmakers to create new standards based on reliable figures and comprehensible calculations.
Any adjustment upwards in social welfare expenditures will cost taxpayers billions of Euros and increase the 100-billion Euro budget deficit. But the Federal Constitutional Court’s task is to ensure that all institutions of the state obey the constitution. Since its foundation the court has helped to secure respect and effectiveness for the free democratic basic order. This applies particularly to the application of the human and fundamental rights. Also social welfare services have to be within the framework of constitutional principles. But now, without losing sense of reality – like Schroder’s reforms intended to do – the administration will prosecute abusers of the welfare systems more harshly. Such strict and merciless controls will also have effects on abusers among immigrants. They should be aware of this!
