Upcoming Changes to Citizens’ Income Reform: What to Expect on July 1st

VonStiff Julia Meggendorfer

That was already at the beginning of the year citizen money replaced the well-known Hartz IV. However, so far only part of the planned laws have applied. On July 1, 2023, the second part of social reform comes into force and will cause some changes again, as announced by the Federal Ministry of Labor and Social Affairs (BMAS):

What will change financially on July 1st with citizen income?

Especially so-called top-ups, that is low-income workersdie additionally receive citizen money, may look forward to. For them, the increase allowances: Employees with an income between 520 and 1000 euros are allowed to keep 30 percent of it. Before it was only 20 percent. So now they have up to 48 euros more per month at their disposal. Anyone who earns less, i.e. between 100 and less than 520 euros a month, may keep 20 percent as before. If you earn more, namely between 1,000 and 1,200 euros, at least ten percent go into your own wallet.

Also for Pupils and students there is an improvement: income up to 520 euros per month side jobs are allowed to keep them completely without counting it against their family income. The same applies to vocational training, people in federal voluntary service or in the voluntary social year (FSJ). Holiday jobs are not taken into account at all, and young people who do voluntary work are also allowed to keep up to 3,000 euros in annual allowances.

By the way: Who next to the Citizen benefit as well as child benefit still has to reckon with deductions. But the According to the federal government, the standard rate should be increased in 2024 become.

What will change in job search support?

The integration agreement that was previously concluded between the job center and the job seeker is now being replaced by the cooperation plan. If the integration agreement was more formal and clarified the obligations of both parties, according to the BMAS the cooperation plan should form the “red thread” for the job search. It will be developed in understandable language and jointly by the responsible person in the job center and the citizen benefit recipient. If there are major differences of opinion, a new arbitration procedure should now help. By the end of 2023, he should have completely replaced the integration agreement.

The job center is also expanding its range of further training courses with holistic coaching. Among other things, this support can accompany training or employment. Who, by the way citizen money receives and tackles further training with a degree, not only gets one Monthly training allowance of 150 euros. There are additional training bonuses for successfully completed intermediate and final examinations. There is a monthly bonus of 75 euros for other further training courses that do not entail a degree but are intended to ensure sustainable integration into professional life, such as computer courses.

Overall, according to the BMAS, job seekers should have more time to study. There should be the opportunity to catch up on a vocational qualification more easily or to acquire basic skills that are needed on the job market, such as reading, arithmetic or IT skills.