KARLSRUHE: Germany's top court ruled on Tuesday (Nov 5) that sanctioning jobseekers deemed uncooperative in the search for work was illegal in some cases, in a blow to the controversial unemployment reforms rammed through by Gerhard Schroeder's government in 2005.
Judges at the federal constitutional court said that the total cut in benefits should never be allowed to exceed 30 per cent, and in cases where lower payments would cause "extreme hardship", no penalties need to be imposed at all.
The sanctions allowed under Germany's so-called Hartz IV benefits system, which combines social welfare and long-term unemployment payments, have long been contested with critics saying they violate the right to a dignified existence.
Under the current rules, a jobseeker's monthly dole can be docked if they fail to turn up for a job interview, turn down employment or miss training opportunities.
In extreme cases, recipients can lose up to 60 per cent of their benefits - and repeat offenders can be cut off altogether for three months.
But judges in Karlsruhe found that the 60-per cent reduction was "unreasonable given that the burden it entails seriously encroaches upon the minimum standard of living guaranteed by fundamental rights."
Furthermore, judges said that a 30-per cent dole cut was "only permissible if the sanction can be waived in cases of extreme hardship" and if its three-month duration can be shortened depending on the jobseeker's cooperation.
Some 5.6 million people were on Hartz IV benefits in Germany last year.
A single jobseeker with no children currently receives €424 (US$472) a month, while couples get €764.
In 2018, a total of 441,000 jobseekers were financially penalised at least once.
The penalties for falling foul of the job centre's guidance are harshest for those under the age of 25.
In the wake of the ruling, Dietmar Bartsch, a leading lawmaker from the far-left opposition party Die Linke, called for a complete overhaul of the system.
"Hartz IV plunges people and their families into the abyss," he tweeted.
"We need a new system of unemployment benefits that provides security and removes the fear of social decline."
But Labour Minister Hubertus Heil, a Social Democrat, earlier this year defended the Hartz IV sanctions.
"The welfare state needs to have the means to demand the reasonable and binding cooperation" of benefits recipients, he said in January.
The Hartz IV system is part of the hated "Agenda 2010" labour reforms forced through by then chancellor Schroeder's centre-left government to tackle the country's high unemployment.
The reforms have been credited with helping Germany achieve record-low unemployment of around five percent, but the tough-love approach has also been hugely divisive.
Critics say Hartz IV has pushed people into low-paid, precarious jobs, and increased inequality in Germany.
Opponents also say the threat of sanctions places a huge psychological burden on jobseekers.
Schroeder paid a heavy political price for the unpopular measures, losing the following general election in 2005 to current chancellor Angela Merkel.
Tuesday's ruling marked the second major defeat for the government over Hartz IV.
The same court ruled in 2010 that the payments for the poorest recipients needed to be recalculated because they did not ensure a minimum standard of living.