Social fraud: most Hartz IV beneficiaries are honest – business

Only a few Hartz IV beneficiaries withhold income from capital or assets and thus wrongly take advantage of basic state security. In 2020, the employment agencies noted only in 945 cases that they had paid too much unemployment benefit II (Hartz IV) because the beneficiary’s assets were too high. This emerges from a response from the federal government to a request from the Greens in the Bundestag. In most cases, overpayments have occurred due to hidden income from mini-jobs or jobs subject to social insurance contributions. According to the response of the Federal Ministry of Labor, a total of 680 euros was overpaid for each case of abuse detected last year.

At the end of July, readers of Bild found this headline in their newspaper about the Federal Employment Agency: “Hunting for the secret assets of the beneficiaries of Hartz IV”. MP Sven Lehmann, spokesman for social policy of the Greens in the Bundestag, wanted to know exactly how the so-called “secret assets” are going. The figures now presented by the federal government clearly show Lehmann: “The caricature of the rich beneficiaries of Hartz IV has nothing to do with reality.

The authorities exchange their data

The majority of abuse cases are exposed through automated data reconciliation. The Federal Employment Agency (BA) and the municipalities which operate employment offices alone and not with the BA are legally obliged to exchange data. Every quarter, Hartz IV beneficiaries compare their personal data with data from other authorities, such as the German pension insurance company or the Federal Central Tax Office. The tax office assesses data on interest income or other investment income for which no tax deduction has been made due to an exemption order. An abuse of service exists, for example, if Hartz IV beneficiaries grossly negligently provide incorrect or incomplete information on additional income or assets and thus receive higher benefits than they are actually entitled to. If this is done deliberately, the Hartz IV recipient will be flagged for fraud.

Thanks to the automated data exchange, offices were able to assess a total of 1.6 million “overlap notifications” in 2020 alone, according to the response from the Federal Ministry of Labor. The result: in 84,280 cases, it was found that too much had been paid. These included 78,382 cases in which previously unknown marginal or insurable employment income resulted in an overpayment. This corresponds to a 93 percent share. By way of comparison: 3.9 million Hartz IV beneficiaries are listed as “employable” in the statistics. In 945 cases, however, investment income and assets resulted in overpayments – a share of just 1.1 percent. The total amount of overpayments last year was 57.3 million euros, or 680 euros per case. Compared to 2019, the figures have changed little: there were 92,357 overpayments for a total of 61.5 million euros. In 2.1% of cases, investment income and wealth resulted in overpayments.

Rules for additional income are controversial

Green Bundestag MP Lehmann therefore comes to the conclusion: “There can be no question of widespread and widespread abuse of assets.” The politician refers to the studies of the Center for European Economic Research (ZEW). According to him, “the vast majority of households in the bottom income decile have very little wealth”. In the income group in which “mainly beneficiaries are found, the distribution is concentrated at zero”, according to the ZEW report. For Lehmann, it is clear: most cases of abuse concern people “who want to work and generate income themselves”. But whoever wins something “should be rewarded, not punished,” he said.

The Hartz IV system’s additional pay rules have been criticized by experts for many years. They consider that the incentive to take up a part-time or full-time job is too low, as a large part of the salary is immediately taken from Hartz IV benefit recipients. Many therefore prefer to combine Hartz IV with a mini job, which leaves them more.

Lehmann advocates “to test the tedious and bureaucratic control of basic security assets. We must relieve the employment centers of the absurd bureaucracy,” he said. The Federal Employment Agency had always stressed that the abuse of services was “not a minor offense”. The fight against abuse systematically protects both the interests of taxpayers and those of the vast majority of legitimate benefit recipients. The BA’s “technical instructions” for its own employees also state:

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