The coalition government wants to get people out of work into the workforce by toughening up the rules around receiving Bürgergeld - the long-term unemployment benefit in Germany, also known as Arbeitslosengeld II.
According to a 31-page paper put together by the coalition, made up of the Social Democrats (SPD), Greens and Free Democrats (FDP) as part of 2025 budget proposals, the plans include making longer commuting times acceptable and introducing more sanctions.
The move is part of a 'growth initiative' aimed at revitalising the sluggish German economy.
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"In order to maintain acceptance of the benefits and to get more of those affected into work, it is necessary to strengthen the principle of reciprocity again," says the paper.
However, not everyone in the coalition is happy about the decision to toughen up the rules around the 'citizen's allowance', which sees people out of work for a long time receive around €563 per month.
Some commentators have said the proposals are similar to the previous controversial long-term unemployment system - Hartz IV - which was known for being sanctions-based.
Here's a look at the big talking points. Keep in mind that nothing is set in stone just yet, and there may be changes.
Increasing commuting times
The SPD, Greens and FDP coalition leaders believe that commuting three hours a day is reasonable if you work more than six hours. Those who work up to six hours, on the other hand, should have to accept a slightly shorter total time for the outward and return journey, namely two and a half hours.
In general, the Job Centre (Bundesagentur für Arbeit) should be able to look for a job for a Bürgergeld recipient within a 50-kilometre radius of their home. By doing this, the government hopes to get more people into work - even if it means people are having to travel further from their home.
There are to be exceptions, for example, if people are looking after children or relatives in need of care.
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Sanctions to be tightened
Under the plans, tougher penalties are to be imposed on recipients of Bürgergeld benefits who refuse to accept reasonable work, training or an integration measure designed to help the long-term unemployed get back into the labour market.
Anyone who refuses reasonable work "without a valid reason" should "have to reckon with increased reductions" to their benefits, the coalition leaders state. The plans are for the allowance to be cut by 30 percent for three months.
Reporting to the jobcenter more often
The government wants to encourage more meetings between those who are unemployed for longer than a year and the jobcenter.
"A high, binding contact density between recipients of the Bürgergeld and the authorities is important for successful placement," says a paper from the Ministry of Finance, which summarises the planned tightening of the citizen's allowance.
In order to increase the success of people getting into work, the coalition wants to oblige certain people to go to the authorities once a month and report there. This should not affect all recipients, but only those who are "available to the labour market at short notice". This excludes, for example, people who have to look after small children or are in further education.
Tougher penalties for those caught working on the side
Anyone who receives Bürgergeld and works illegally on the side will soon face tougher penalties if the plans are approved. For those caught, the Job Centre will be able to reduce benefits by 30 percent for three months.
However, undeclared work must first be uncovered. In order to improve the rate, the government wants to make it a requirement for unemployment officers to report suspected cases to customs. Customs is responsible for combating undeclared work.
At the moment, anyone who works illegally is committing an administrative offence or a criminal offence, depending on the extent of the offence, a fine may be imposed. Anyone who receives unemployment benefits is also committing social fraud, which can be punished with imprisonment or a fine.
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Reduced grace period for using own assets
People should generally use up their own assets before they receive Bürgergeld from the state. However, there is a protected amount of assets that do not have to be touched within a special grace period.
As part of the Bürgergeld reform, the coalition had increased protected assets to €40,000. An additional €15,000 is added for each additional person in the household.
Under the new plans, the waiting period during which the money doesn't have to be used is to be reduced from the current 12 months to six months, according to the traffic-light coalition leaders. However, the pension scheme is excluded from this.
What is the timetable for this?
The above-mentioned proposals are announcements from the agreement paper that Chancellor Olaf Scholz, Economics Minister Robert Habeck and Finance Minister Christian Lindner have drawn up, as well as from German media reports citing sources.
Many questions are still unanswered and a lot has to be finalised in the coming weeks and months.
What's the reaction?
SPD General Secretary Kevin Kühnert emphasised this week that aspects of the agreement are not yet fully formulated. He is sceptical about how big an impact the changes to the Bürgergeld will have. "The assumption that there are hundreds of thousands of lazy people on unemployment benefits" is technically incorrect, Kühnert told German broadcasters.
Beate Müller-Gemmeke, from the Green Party, also believes that the measures "don't help one bit with integration into work".
Justice Minister Marco Buschmann, FDP, on the other hand, praised the planned tightening of the law as "socially just".
Meanwhile, German newspaper Taz ran a story on Monday the headline: 'Bald wieder wie Hartz IV?' - "Soon to be like Harz IV again?"
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