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← Overview Database of Innovative Social Policies in Europe

Universalisation of in-work benefits

Country of implementation
Germany
General short description of the innovation
The introduction of the unemployment benefit II (see no. 18) has also resulted in a universalization of in-work benefits. Incentives to take up work even it does not yield a living wage were increased by constructing a sliding scale of disregard for earnings. Where low earners receive tax credits in countries like France or the UK for instance, German low-wage earners not supported by spouses, partners or other means will receive an income supplement from the unemployment benefit II-scheme.
Target group
Total Population
Policy Field
  • social
  • wage
Type of Policy
  • public
Duration of the policy
January 2005; at present there is no limit foreseeable
Scope of innovation
  • Scope: Structural § the benefit structure for low-wage earners was changed fundamentally.
  • Number of intended beneficiaries: No number of intended beneficiaries applicable. At present about 1.3 million people receive both, an income from gainful employment and unemployment benefit II as a kind of ćadd on benefitĆ.
  • Spatial coverage: national
General description of (intended) objectives and strategies
In this respect the unemployment II benefit functions as an incentives to take up work even it does not yield a living wage. In other words: The ćadd on benefitĆ should ensure a greater degree of acceptability of low-wage work.
Nature of the innovation-long-term perspective
The reform was a radical change of the unemployment-related benefit system best described as re-commodification.
Type of ideal-typical strategy for the innovation
  • typical strategy for the innovation (optional; according to Obinger)-dualisation
  • typical strategy for the innovation (optional; according to Obinger)-liberalisation
Type of innovation
  • new policy, practice or measure
New outputs
  • benefit eligibility
  • wages
Clarification of intended mechanisms, outputs and outcomes (optional)
Where low earners receive tax credits in countries like France or the UK for instance, German low-wage earners not supported by spouses, partners or other means will receive an income supplement from the unemployment benefit II-scheme.
Intended target group
All household with an earned income below the threshold for basic income support (including rent expenses)
Working age population
  • employment situation (please specify: e.g. typical work/atypical/unemployed) (In most of the cases the employees affected are working in atypical employment relations (mostly mini-jobs). I n some cases beneficiaries might work in a standard employment relationship (breadwinner household, more children) )
  • income level (low/medium/high) (Low wage earners)
  • main source of income: paid work
  • main source of income: social protection (please specify; e.g. unemployment benefits/disability benefits/social assistance/other benefits) (Unemployment benefit II. The main source of income depends on the amount of earned income in relation to the demand of the household (because of household composition). )
Actors involved in policy-making/implementation and/or evaluation
  • making/implementation and/or evaluation-agency or national social insurance body
  • making/implementation and/or evaluation-central state
  • making/implementation and/or evaluation-municipal government
Intended output
  • benefit eligibility
  • leave schemes
Did the innovation have any outcome related to job quantity?
Increasing the employment rate by offering incentives to work in low-pay jobs
Intended and unintended outcomes
In 2011, 29% of recipients of unemployment benefit II were gainfully employed
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