The German Welfare System
The German Welfare System
written by A. L. Hart Havens on October 1, 2020
The modern German welfare system, which came into effect in 2005 and is colloquially referred to as Hartz IV, bears the name of the fourth section of a labor market reform recommendation submitted by Peter Hartz, then Volkswagen executive and political advisor to German Chancellor Gerhard Schröder. The German Language Association selected Hartz IV as the 2004 German word of the year.
In a nutshell, working-age citizens and residents of Germany are eligible to claim Hartz IV welfare benefits if they are unable (or unwilling) to find work, have exhausted all available unemployment benefits, and are deemed by the government to be capable of securing gainful employment.
People who are not expected to pursue gainful employment, such as children, severely disabled individuals, and senior citizens with insufficient pensions and assets, are entitled to a separate type of welfare. Although the benefits are similar to those of Hartz IV, these welfare recipients are not required to demonstrate efforts aimed at securing employment.
Living Large on the Public Dime
So just how generous is the German welfare system? Single Hartz IV recipients without children or special needs receive a monthly welfare payment ranging anywhere from approximately €700 to €1,300. The exact payment amount consists of a fixed €432 subsidy plus the actual monthly rent of the welfare recipient’s government‑approved 500‑square‑foot apartment including cold water, garbage pickup, and heating costs (but not electricity or hot water).
Each German town establishes its own rent cap limiting how expensive a Hartz IV apartment and the aforementioned covered utilities are allowed to be. The highest rent caps can be found in expensive cities like Munich and Bonn, while rural towns in eastern Germany feature the lowest caps. Hartz IV recipients are required to pay their own rent, utility bills, and other expenses using their monthly welfare payments. Free comprehensive health insurance policies are provided to everyone covered by Hartz IV. Additionally, welfare entitlements undergo annual increases to offset inflation.
Although people on the German welfare system are officially expected to be searching for work at all times, they are nonetheless permitted to go on vacation for up to three weeks at a time and up to six weeks per year without forgoing any benefits.
“Hands off My Assets. I’m on Welfare!”
Welfare recipients also enjoy a certain degree of asset protection (Schonvermögen), as they are permitted to maintain bank account balances of up to approximately €11,000 while continuing to receive welfare benefits. Although any balances above the threshold must be depleted before claiming Hartz IV, this problem appears to be easily resolved by conducting timely cash withdrawals.
Welfare recipients are also permitted to own or purchase a car valued at up to €7,500 without having to fear the loss of any benefits. Designated individual retirement accounts are also off limits for the welfare agency when determining a person’s Hartz IV eligibility.
Furthermore, homeowning single welfare recipients with no children are permitted to continue living in and retain ownership of their 900‑square-foot house or 800‑square-foot condominium while receiving monthly welfare payments of €432 plus the covered utility costs and free comprehensive health insurance. As a result of this rule, homeowning welfare recipients are afforded living quarters nearly twice the size of those available to welfare‑receiving tenants.
The Land of Milk and Honey
The availability of welfare benefits is not limited to German citizens. Foreigners holding a valid residency permit are also entitled to Hartz IV after living in Germany for three months. In addition, refugees are allowed to claim full welfare benefits after only a short stay in Germany.
The total number of foreign nationals claiming Hartz IV benefits now accounts for more than one third of Germany’s 4‑million‑strong community of welfare recipients. The actual percentage is likely even higher given that holders of both a German and a foreign passport are counted exclusively as German welfare recipients.
It should not come as a surprise that the prospect of claiming German welfare benefits – consisting of a monthly payment of up to €1,300 plus free comprehensive health insurance without having to lift a finger – is quite an appealing one even to the most industrious of third‑world immigrants.
Bamboozling the System
A hotly debated aspect of Hartz IV involves the monetary penalties that can be imposed for failure to fulfill the monthly quota of job application submissions and refusal to attend job interviews brokered by the local welfare agency, among other things. Many politicians wish to do away with these requirements.
Despite the strictness of the rules on paper, it is common knowledge throughout Germany that only minimal effort and the application of a few easy tricks are needed in order to convey to a prospective employer the image of an uneducated, unmotivated, and unemployable candidate, which in turn will enable the welfare recipient to remain on Hartz IV indefinitely.
Frequently applied tricks include faking illnesses, submitting poorly written cover letters, and committing intentional gaffes at mandatory job interviews. There is no shortage of internet‑based advice for Hartz IV recipients who are intent on ensuring that no employer will ever wish to enlist their services.
Hiding in the Shadows
A person living in the same household with a significant other who earns a sufficient salary or owns sufficient assets (as deemed by the German government, of course) is expected to rely on the better‑situated person for financial support and is therefore excluded from welfare benefits (Bedarfsgemeinschaft).
Skirting around this rule often requires unmarried couples in these situations to go to considerable lengths to conceal their relationship from the welfare agency. This appears to be a fairly common practice, which is not surprising given the significant monetary benefit and the perceived ease of getting away with it.
And You’re Footing the Bill
Anyone reading this article from Germany or any other western country may be mildly amused and/or downright appalled. In either case, it should be kept in mind that you are involuntarily contributing to an outrageous system of handouts that will require the imposition of ever‑increasing taxation and wealth confiscation on productive citizens.
With formerly fringe ideas such as universal basic income, free universal health insurance, and free college education likely to become reality in western countries in the very near future, the broke and woke western governments will be looking to corral their productive milk cows by any means necessary in order to continue their pro‑welfare, pro‑warfare policies.
As a result, we will undoubtedly see western governments continue to make life difficult for citizens seeking to become tax‑nonresident or seeking to simply exit the country (Australia). This will coincide with other western governments imposing US‑style citizenship‑based taxation aimed at trapping citizens’ wealth within their borders.
If you’re living in one of these countries with your entire political and financial exposure limited to that country, you should consider yourself a sitting duck with your assets ripe for the taking.
Second Citizenship as an Escape Ladder Strategy
So, what can be done to keep assets out of reach from the greedy hands of government? The most effective safeguard involves the acquisition of at least one additional citizenship in a relatively free country outside of the home country’s sphere of influence. This is a sound and proven method of protecting wealth, individual liberties, and physical safety in uncertain times.
Possessing one or more additional citizenships affords an individual the luxury of relocating to a more desirable national jurisdiction at the drop of a hat and the opportunity to spread political and financial risks across borders. And although this can also be achieved to a certain extent by obtaining foreign residency permits, it is the institution of citizenship that offers the highest level of rights and protections to individuals by a national government.
Being sworn in as a new citizen at a naturalization ceremony is a unique experience quite unlike any other in the arena of civic achievement. It is the sudden realization of having finally broken free of a single government’s dominion that evokes feelings of exhilaration and genuine liberation. Now, are you ready to unleash your international game and begin living the liberated life?