social security

Pay Your Own Way

foreigners-patrick pleul-dpa
While many come to Germany to find work, some hope to cash in on the country's generous social benefits.
  • Why it matters

    Why it matters

    The government wants to pass a law that only gives non-Germans access full welfare benefits after they have worked in the country for five years.

  • Facts

    Facts

    • The Federal Social Court ruled in December that declared that anyone staying in this country longer than six months without a job can receive welfare benefits.
    • The Labor minister Andrea Nahles moved this week to pass a law that would limit the full impact of this ruling She wants to restrict social benefits for non-German E.U. citizens until they have worked in Germany, without state assistance, for five years.
    • In 2014 Germany paid €150 million to Rumanian and over €85 million to Bulgarian families.
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    Audio

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The heating was not working, but nobody felt the cold. There were nearly a dozen people crowded into the small room, which it smelt of strong coffee and cold smoke.

All of them were clutching their paperwork, which ranged from a letter from officials in Duisburg and a summons from the public prosecutor’s office in Berlin to a warning from the city of Bochum.

The welfare café in Duisburg, in Germany’s most populous state of North-Rhine Westphalia, is part of a program called “Mensch ist Mensch,” or people are people, that is designed to help people on the fringes of society navigate the country’s complex social security system. The program has been particularly necessary since a ruling by the Federal Social Court in December that declared anyone staying in the country longer than six months without a job can receive welfare benefits. Thousands of families could benefit from this ruling, if only they could deal with the paperwork.

But Labor Minister Andrea Nahles moved on Thursday to pass a law that would limit the full impact of the ruling. She wants to restrict social benefits for non-German E.U. citizens until they have worked in Germany, without state assistance, for five years.

After that period, they can apply for a reduced version of Germany’s unemployment benefits, known as Hartz IV, or welfare benefits, but would have to take a job they are offered. Ms. Nahles also emphasized that even accepting a mini-job would be sufficient to justify a claim for benefits before the five-year period had expired.

In 2014 Germany paid €150 million to Romanian and over €85 million to Bulgarian families in child benefit.

Under the plan, a safety net would help those who don’t qualify for welfare payments with housing and costs for four weeks. After that, they will be expected to return to their home country if they are unable to find another job in Germany.

At the Duisburg café, most of the people seeking assistance are from the Roma community. They hope to receive health insurance and other social benefits. One of them is Luminita Caldararu who survives on a low paying part-time job in a café and the child allowances she receives for three children. She remembers the first Roma family to make an application at Mensch ist Mensch.

It was at the beginning of February, and the parents of three children had unsuccessfully sued for unemployment benefits. The welfare court of Duisburg turned down their application, but the judge awarded the family payments totaling €1,500 ($1,700) for five weeks and pointed out that they were now entitled to welfare benefits.

So far, officials at the Duisburg welfare office have noticed no significant increase in the number of welfare-benefit applications from other E.U. countries. Welfare offices in Berlin-Neukölln and Mannheim, which have large Roma communities, say the same. But the clock is ticking in nearly every city.

The city of Gelsenkirchen near Essen, for example, expects it will have to pay out in as many as 140 ongoing court and appeal cases. And authorities expect a sharp increase in the number of new applications.

Local authorities estimate that as many as 130,000 E.U. residents living in Germany, especially Romanians and Bulgarians, could apply for welfare benefits and their applications, if approved, could cost up to €800 million.

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Andrea Nahles wants to restrict social benefits for non-German E.U. citizens until they have worked in Germany, without state assistance, for five years. Source: Getty Images

 

The number 130,000 is based on an estimate by the state welfare court in Essen in 2013 but the number meanwhile is much higher. Since the beginning of 2014, when the European Union’s freedom of movement rule also applied for Rumanians and Bulgarians, their numbers have grown enormously. In that year alone, the number of Romanians living in Germany rose by more than 93,000 and of Bulgarians by around 39,000. Meanwhile, more than 600,000 Bulgarians and Romanians live in Germany, making it their third country of choice after Italy and Spain.

Still, the statistics don’t reveal who is coming to Germany for a job and who is fleeing from discrimination and poverty. A study by the Friedrich-Ebert Foundation shows a larger proportion of highly qualified individuals among the migrants. Romania itself estimates that as early as 2011, more than 3.5 million Romanians were working abroad – nearly every fifth citizen. The company admits to having a brain drain problem.

Child allowance is considered an important source of income for people from eastern Europe. In 2014, Germany paid €150 million to Romanian families and more than €85 million to Bulgarian families.

Ms. Caldararu claims she didn’t come to Germany because of welfare benefits. “We all came to Germany because we want to work,” she said. Today, around 63 percent of all Romanians living in the country have a job.

Matthias Dobelius of the Friedrich-Ebert foundation in Bucharest noted that while Romanians are well integrated in the German labor market, they often have jobs beneath their qualifications. Many are working in the low-wage meat industry or taking monthly contracts with package delivery services. Often they have to be content with as little as €40 a day.

For now, at least, Germany doesn’t have to be overly worried about the number of foreigners seeking work in the country. The unemployment rate is low; it dropped this month by 0.2 points to 6.3 percent. According to data released this week, the seasonally adjusted unemployment has fallen in April the seventh consecutive month. Overall, the federal employment agency registered in April 2.744 million unemployed – 101,000 less than in March.

But the flow of refugees entering the labor market continues unabated, and could push up unemployment and cause tensions. In this climate, it makes sense for the government to make sure the costs of supporting and integrating non-Germans into the system are kept as low as possible.

 

Corinna Nohn is a specialist on east and central Europe and writes on family policy. Frank Specht is based at Handelsblatt’s Berlin bureau, where he focuses on the German labor market and trade unions. To contact the authors: nohn@handelsblatt.com and specht@handelsblatt.com

 

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