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More self-employed on Hartz IV welfare

An increasing number of Germans running their own businesses are claiming basic social benefits as their income falls, according to a report in the Süddeutsche Zeitung on Tuesday.

More self-employed on Hartz IV welfare
Photo: DPA

Even those whose companies are busy enough to employ staff are coming out with so little at the end of the month that they qualify for the basic welfare benefits known as Hartz IV.

Figures from the Federal Labour Agency (BA) show that from 2007 until 2010, the number of self-employed people who relied on Hartz IV rose by more than 50,000 to an annual average of 125,000. In February this year, the BA counted just under 118,000 who were claiming. Around 85,000 of these were clearing less than €400 a month on their own while around 25,000 earned less than €800 a month.

The suspicion arises with many claimants that they don’t really need the money, but are able to make their situation look so bad on paper that they can claim the state aid.

“Of course the self-employed can theoretically structure their income in such a way that they remain in need. But we don’t have any empirical evidence over whether and how often this happens,” said Heinrich Alt, manager at the BA.

There are around 4.4 million self-employed people in Germany, including a growing number of one-person businesses, many of which just about manage to keep themselves afloat and can sometimes require Hartz IV to help them keep going.

Interestingly, around a sixth of the self-employed people who draw Hartz IV live in Berlin, the figures show.

Hartz IV benefits can include up to €365 a month, as well as help with rental costs and up to €287.72 towards a private health insurance, the paper said.

“The verdict of whether a self-employed person actually needs the help, although they perhaps have staff on their books, whether the business costs are avoidable or reasonable, or whether the till records are right, is something for tax regulation gourmets rather than Job Centre staff,” said Alt.

He said the idea should be considered of putting a time limit on how long self-employed people should be able to claim Hartz IV benefits, particularly when they employ staff.

“One has to get into the black at some point, or, even though it will be painful, give up the self-employment. The taxpayer cannot continually help to finance a business idea that is not working,” he said.

The Local/hc

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EXPLAINED: What to know about Berlin’s extended €29 ticket

Berlin is set to extend its reduced-cost public transport deal. Here's what you need to know, whether you live in Berlin or are visiting the capital.

EXPLAINED: What to know about Berlin's extended €29 ticket

What is the ticket anyway?

The offer allows people to use Berlin’s local public transport network, such as buses, trams, the underground and S-Bahn network in the ‘AB’ service area for €29 per month.

The card is a follow-up to the Germany-wide €9 ticket that was in place across regional public transport networks in June, July and August – although it works in a different way (more on that below). 

A regular monthly ticket in Berlin can cost anything from around €46 to €86, depending on the subscription or ticket. The Social Democrats in Berlin said it results in savings for people of €31 to €57 per month compared to a monthly AB ticket. 

What’s happening now?

The €29 ticket, which was introduced in October, was to run until the end of December. But the Berlin Senate has announced it will carry on until at least the end of March 2023. 

This was agreed by the Berlin governing coalition – made up of the SPD, the Greens and the Left Party – during talks on a supplementary budget in the Senate session on Tuesday November 1st.

“The €29 ticket will be extended until the end of March,” Mayor Franziska Giffey (SPD) said after the meeting.

READ ALSO: Berlin to extend €29 travel card, and offer €9 ‘social ticket’

The Senate also announced plans for a special ‘social ticket’ in Berlin that will cost €9 a month and last until at least the end of March next year.

At the moment, Berlin’s “Sozialticket” is €27.50 and is available to those who qualify for the Berlin Pass, including benefits claimants and asylum seekers. 

According to the Senate, the group of those who qualify for the ticket will be expanded, so that around 650,000 people will be entitled to the new ticket for €9 a month. That would amount to one in six Berliners, regional newspaper the Tagesspiegel reported. School children already travel for free on the capital’s buses and trains.

The total aid package from the local government to combat the energy crisis will amount to €2.6 billion, with the planned local transport concessions accounting for €500 million of this amount. 

What if I’m already a subscriber or ‘Abo’ holder?

People with a subscription ticket automatically benefit from the promotion.

“The reduction of the fare to €29 for the months of October, November and December 2022 (which is now set to be extended), and the associated refund or settlement will be made automatically by the respective transport company holding the contract,” Berlin transport operator BVG says. 

“Your monthly debit amount will be reduced to €29; in case of subscriptions with annual payment, the respective difference will be refunded after the end of the campaign. Your VBB-fahrCard is valid as before.”

A spokesman from the BVG told The Local that the details will “of course be updated with details about the current extension”.

Can tourists visiting Berlin use it?

The €29 ticket is a an attractive offer – especially given that a standard 7-day ticket costs €36. 

However, keep in the mind that the €29 ticket is a subscription. That means that it will run until the end of the promotional period at a cost of €29 per month. After that point, “the subscription contract for the selected fare product will run for a total of 12 months”, according to the BVG, one of the transport operators in Berlin. 

“Unlike the €9 ticket, the €29 special (deal) is not a new type of monthly ticket,” a spokesman for BVG told The Local.

“It is a regular 12-month-subscription, but with a reduced price of 29 Euros/month for the months of October through December. (To be extended until the end of March as announced by the Senate).

“However, it is possible to end the subscription at the end of December (updates regarding the extension will be communicated).”

Furthermore, the spokesman added that it is currently not possible to get the ticket for the month of November.

“While we made it possible to start an October subscription until well into the month of October, for November, the usual deadlines applied,” the spokesman said.

“Therefore, at this very moment, you cannot start a subscription for the month of November. Your earliest start would be December. We a working on a solution for those who want to start their subscription earlier.”

Can it be used across Berlin and Brandenburg?

One of the drawbacks of the €29 travel card is that it is only valid in Berlin’s AB zone, which includes the inner city and most of the suburbs. It means, though, that the C area – which includes the BER airport and Potsdam, Brandenburg’s capital, are not covered. 

This is the case because the Berlin and Brandenburg government were not able to reach an agreement on a public transport ticket.

If you have the €29 ticket and want to travel to the airport for example, you need an ‘add-on’ ticket to do so. 

The graphic shows the ABC zones in Berlin. The €29 ticket is for the AB zone. S

The graphic shows the ABC zones in Berlin. The €29 ticket is for the AB zone. Screenshot: BVG

What about the €49 nationwide ticket?

As The Local has reported, there are plans for a Germany-wide successor to the €9 ticket, which is likely to cost €49 per month. 

Berlin mayor Giffey said that it isn’t clear that the €49 ticket will be introduced in January as originally planned, but may come later. 

Giffey said she thought the ticket could come in April instead. 

Berlin Transport Senator Bettina Jarasch (Greens) described the Berlin €29 extension as a “bridge solution” until the nationwide ticket comes on the market. 

In the meeting, the SPD had pushed to extend the €29 ticket until the end of 2023, but was unable to get its way – at least for now. 

Jarasch is now tasked with negotiating what happens from April in Berlin.

It is likely that the state premiers will agree on a nationwide standard ticket this week. After this is agreed, Jarasch is to sound out the possibilities for the future in the Berlin-Brandenburg Transport Association (VBB) area. 

For more information on where to sign up for the ticket, check out the the BVG website.

UPDATE: ‘Deutschlandticket’: What you need to know about Germany’s new €49 ticket

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