Hartz IV reform

In a late night session, Germany's governing coalition, together with the opposition Social Democrats have come up with a new agreement on amending the rate of the social welfare payment known as Hartz IV.

After eight weeks of negotiations, the parties agreed to increase the welfare payments by five euros ($6.8) a month to 364 euros ($498), and then again to 367 euros in January 2012.

The package also included agreement on new minimum wage structures and the financing of an education package for needy children.

There are 4.7 million adult recipients of Hartz IV, which is paid out to the long-term unemployed. The benefit payment is in addition to rent, heating and health insurance.

Germany's Labor Minister Ursula von der Leyen said they were relieved at "what we've managed to do" after Sunday's 10-hour negotiations. The Christian Democrat politician said the result was "difficult, but worth it."

Compromise takes time

Social Democrat negotiator and deputy party leader Manuela Schwesig said the compromise was "impressive overall," especially as around 2.5 million children from low-income families will now receive special subsidies for school lunches and tutoring.

In February 2010 Germany's Constitutional Court ruled that the existing welfare payments were not properly calculated. It set a deadline of the end of last year for payments to be made on a new basis.

However, that deadline was missed after the government could not get the agreement of the opposition on a new Hartz IV deal. While the government suggested a five euro monthly increase, the opposition wanted six, along with a raft of other welfare measures.

The government needed the approval of the opposition since it does not have a majority in the upper house of parliament, the Bundesrat, which is made up of representatives of the federal states.

Author: Catherine Bolsover (epd, dpa)
Editor: Andreas Illmer