The Hartz IV rates will go up slightly from January 22nd, the federal cabinet decided on Wednesday. 

The standard rate for single adults who are Hartz IV welfare recipients will go up by €3 to €449, while the rate for young people aged 14 to 17 will also rise by €3 to €376. Adults under 25 without their own household will receive €360 – also an increase of €3 per month.

The rate for children up to five years-old in a Hartz IV household will be €285 euros per month in the new year instead of the previous €283. For six to 13-year-olds, the rate will also increase by €2 to €311. 

Hartz IV – or Unemployment benefit II – is a controversial type of long-term welfare assistance, which requires recipients to fulfil a specific set of conditions, like active job hunting or attending education classes – in order to receive a monthly payment and housing assistance. 

EXPLAINED: Why are Hartz IV benefits so controversial in Germany?

Why is the increase so low?

The adjustment of the Hartz IV standard rates is based on the wage and price development of the past year.

That means the benefits are based on 2020 – when wages fell overall by 4.7 percent in the second quarter alone due to the Covid crisis. 

Millions of people were on Kurzarbeit (reduced working hours), and many lost their job. At the same time, the German government cut the value-added tax (VAT) to 16 percent for the second half of 2020. This means that prices effectively fell during this period.

READ ALSO: 10 golden rules to know if you lose your job in Germany

From January 1st this year, single adults received a €14 increase in Hartz IV payments, while the rate for young people aged between 14 and 17 went up by €45. For children up to the age of five living in a Hartz IV household, the benefit increased by €33. 

What’s the reaction?

The move by the SPD-led social affairs ministry has been slammed by opposition parties, who say the increases do not reflect the rising cost of living in Germany. 

“Raising the standard rates by a measly €3 a month is little more than a pittance,” said Left Party parliamentary group vice chairwoman Susanne Ferschl.

“Rising consumer prices are causing the money to evaporate faster than it’s in the account.”

Ferschl said the Hartz IV standard rate should be increased to €658 as an “immediate measure”.

Green Party faction leader Katrin Göring-Eckardt criticized the size of the increase as “irresponsible”. Green Party social policy expert Sven Lehmann called for an increase in rates of at least €50 “as a first step.”

The German Federation of Trade Unions (DGB) and the social association VdK also criticised the new Hartz IV rates, which will come into force from January next year. 

“The planned increase of only €3 is significantly below the price trend,” said DGB board member Anja Piel to the newspapers of the Funke Mediengruppe.

VdK President Verena Bentele said the government was once again cutting back on those “who are least able to defend themselves.”