Small increase in German benefits causes outcry

A decision by German Chancellor Angela Merkel's government to offer only a slight increase in welfare benefits to the 6.7 million people who rely on state support was resoundingly criticized Monday from the opposition and unions.

Social Democrat Hannelore Kraft, the state governor of North Rhine-Westphalia, called the euro5 ($6.71) increase "scandalous" in an interview with German newspaper group WAZ and her party slammed Merkel for failing to support the nation's weakest members.

On Sunday, Merkel's government agreed to raise welfare benefits by euro5 to euro364 per month starting January 2011. It left the subsidy for children unchanged at euro215 to euro287, depending on age.

"I want somebody to explain to me how to take care of a child in a dignified way with euro215," Green party leader Claudia Roth told n-tv. "It's a slap in the face of those who are unemployed for a long time."

Germany's umbrella union group DGB called for a nationwide protest against the measure.

Merkel defended the small rise, saying benefits must be sufficient to "guarantee the basic needs" but that their foremost objective is to motivate people to seek a new job.

The measure requires approval from both houses of parliament and could face stiff opposition in the upper house, where Merkel's coalition no longer holds a majority.

The government had been widely expected to increase the child subsidy for the unemployed, after the constitution court indicated in a ruling earlier this year that the amount was not enough to ensure equal educational chances. The court had ordered the government to recalculate the welfare benefit before January 2011.

Labor Minister Ursula von der Leyen said the calculations showed the amount was sufficient for basics. Her ministry plans to introduce an additional benefit package for educational and sports activities for children from low-income families next year, meant to provide annual subsidies adding up to euro250 per family.

"It's not only about caring for the minimum of their physical needs, but foremost about improving their chances in life," she told reporters at a news conference.

Also controversial was a decision to strike tobacco and alcohol, worth euro20 in benefits, from the list of basic needs, although the cost of an Internet connection and other things were added, leaving the total barely unchanged.

Von der Leyen said tobacco and alcohol were taken out because they're not an existential need. "Households with a small budget also have to set their priorities," she said.

The slight increase will cost the government about euro300 million, von der Leyen said. She said that her ministry won't have to implement any cuts to pay for it, because the recovering economy is getting people back into work, requiring fewer welfare payments.

Every German who is unemployed for more than a year, or has no other source of income may receive the welfare benefit, in German commonly referred to as "Hartz IV."

The government has stressed the welfare benefit, plus the rent subsidy that recipients receive have to remain below the lowest wages in the country to maintain an incentive to seek employment. Because Germany does not have a legal minimum wage, however, there is ample room to debate the maximum level for state support.

"People who get up every morning and have to make a living for themselves need to have the impression that it's worth it," von der Leyen said.