Work Package 5 – the national arena for combating poverty National report: Germany Norbert Petzold (in collaboration with Dorothee Spannagel) Jean Monnet Centre for Europeanisation and Transnational Regulations (CETRO), Carl von Ossietzky University Oldenburg Deliverable D5.1 FP7 project ‘Combating Poverty in Europe: Re-organising Active Inclusion through Participatory and Integrated Modes of Multilevel Governance’ Grant Agreement no. 290488 Coordinating Organisation: Carl von Ossietzky Universität Oldenburg (CETRO) This project is funded by the European Union under the 7th Framework Programme Contents Figures........................................................................................................................................ 3 Abbreviations ............................................................................................................................. 4 Foreword .................................................................................................................................... 5 Introduction ................................................................................................................................ 6 1. The changing demand for minimum income since 1990 ................................................... 7 1.1. Structural drivers of increasing demand for minimum income protection ................. 7 1.1.1. The protective capacity of unemployment insurance .......................................... 7 1.1.2. The protective capacity of employment ............................................................... 9 1.1.3. The protective capacity of the family ................................................................ 16 1.2. The impact of the economic crisis since 2007 .......................................................... 17 2. Institutional and Policy Legacies in National Anti-Poverty Policy ................................. 18 2.1. The minimum income protection architecture in the mid-2000s .............................. 19 2.1.1. The development of the role of means-tested provision in the national social protection system since 1945 ........................................................................................... 22 2.1.2. The structure of minimum income provisions for working-age people ............ 23 2.2. The extent and structure of ALMP in the mid-2000s................................................ 25 2.3. The extent and structure of other services of potential relevance to working-age minimum income claimants in the mid-2000s ..................................................................... 26 2.3.1. Childcare provisions and specialised support services for single parents ......... 26 2.3.2. General employment retention and advancement support and specialised support services for the working poor ............................................................................. 27 2.4. Governance of minimum income provision and related services in the mid-2000s . 28 2.4.1. Administration and policy making..................................................................... 28 2.4.2. Delivery.............................................................................................................. 31 3. The Dynamics of Active Inclusion Reform ..................................................................... 33 3.1. The political construction of the reform agenda ....................................................... 33 3.2. Policy legacies and feedbacks ................................................................................... 41 3.3. Institutional constraints and opportunities ................................................................ 49 3.4. The EU’s influence on national-level policy development ....................................... 52 4. The National Policy Framework for Active Inclusion ..................................................... 55 4.1. The structure of minimum income rights .................................................................. 55 4.1.1. Institutionalisation.............................................................................................. 55 4.1.2. Benefit structure and generosity ........................................................................ 56 4.1.3. Benefit administration ........................................................................................ 57 4.2. The activation of minimum income claimants .......................................................... 57 4.2.1. Personalisation ................................................................................................... 57 4.2.2. Conditionality .................................................................................................... 58 4.2.3. Service provision ............................................................................................... 59 4.3. The organisation of active inclusion delivery systems ............................................. 63 4.3.1. Structure and operation of lead agencies ........................................................... 63 4.3.2. Inter-agency coordination .................................................................................. 65 4.3.3. Marketisation ..................................................................................................... 66 5. Assessment ....................................................................................................................... 68 5.1. A national strategy? ................................................................................................... 68 5.2. A strategy for all working-age groups? ..................................................................... 68 5.3. A multi-dimensional approach to working age poverty? .......................................... 70 Conclusion ............................................................................................................................... 74 References ................................................................................................................................ 75 2 Figures Figure 1: Unemployed persons in SGB II (ALG II) and SGB III (unemployment insurance) December 2005-December 2011 ............................................................................................... 8 Figure 2: Development of unemployment rates in Germany 1949-2012 .................................. 9 Figure 3: Employment rates 1995-2010 .................................................................................. 11 Figure 4: Unemployment rates................................................................................................. 11 Figure 5: Youth unemployment rates 1995-2010 .................................................................... 12 Figure 6: Unemployment rates for males and females in Germany and the EU 15 ................ 12 Figure 7: Long-term unemployment as share of total unemployment 1995-2010 .................. 13 Figure 8: Overall at-risk-of-poverty rates (population aged 16-64) ........................................ 13 Figure 9: At-risk-of-poverty rates by most frequent activity status: unemployed (left) and working (right) population ....................................................................................................... 14 Figure 10: Atypical employment as share of the total workforce 2000-2009 ......................... 15 Figure 11: Single parents in relation to the whole working age population 1996-2010 .......... 16 Figure 12: At-risk-of-poverty rates of single parents .............................................................. 17 Figure 13: The three pillars of social protection ...................................................................... 18 Figure 14: The German MIP system ........................................................................................ 20 Figure 15: Number of beneficiaries and expenditures of different MIP schemes ................... 21 Figure 16: Development of ALG II standard rates 2005-2013 ................................................ 24 Figure 17: Yearly social minimums for single persons, couples and children as reported by the Federal Government in comparison with the national poverty threshold of Germany 2005- 2011.......................................................................................................................................... 25 Figure 18: Overall expenditure on ALMP as % of GDP 2003-2010 ....................................... 26 Figure 19: Formal childcare with different weekly durations as share of children's age groups 2005-2009 ................................................................................................................................ 27 Figure 20: Distribution of responsibilities between BA and municipalities for the delivery of ALG II transfers and services .................................................................................................. 28 Figure 21: Governance Map Germany .................................................................................... 30 Figure 22: MIP reforms in Germany 2000-2012 ..................................................................... 43 Figure 23: Standard rates of ALG II in 2013 ........................................................................... 55 Figure 24: Standard rates of Sozialgeld in 2013 ...................................................................... 56 Figure 25: Reasons for sanctions as share of all sanctions 2007-2012 ...................................