The controversial Hartz-IV reform has often been called Germany's boldest postwar welfare reform. It focused on pushing the jobless to find work more quickly, limiting the period during which people could collect unemployment. It was designed amid soaring unemployment – and the financial pressures of absorbing Germany's ex-communist states and a European call to make the German economy more competitive.
Some said it was a courageous step. But others condemned it as an attack on a quintessentially German principle of solidarity and social harmony, by spurring the rise of low-paying, precarious jobs.
Two families ultimately took the government to court, saying that children's benefits were too low for them to survive financially. Hartz IV merged unemployment and welfare payments, with adults receiving a "basic security" lump sum of €359 (about $490) monthly and children getting 60 to 80 percent of that. Their case went all the way to the Supreme Court – and won.
Calculating the needs of children as a percentage of the needs of adults is "arbitrary and not transparent," said court president Hans-Jürgen Papier, asking the government to redesign the system so families can live "according to minimum humane standards."
"For the first time ever, the government has to grapple with what it is a child really needs," says Ulrich Schneider, president of Paritätische, an association of 10,000 nongovernmental charitable social groups in Berlin, describing the ruling as a "historic victory" for 2.2 million children on welfare. "The judges have put dignity – and not how to calculate children's benefits so that the government spends as little as possible – at the heart of the discussion. How the government achieves that – with all-day schools, free school lunches ... free entries to museums and the theater – is another question."