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Reforming European Welfare StatesGermany and the United Kingdom Compared$

Jochen Clasen

Print publication date: 2005

Print ISBN-13: 9780199270712

Published to Oxford Scholarship Online: February 2006

DOI: 10.1093/0199270716.001.0001

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Appendix A Major legislative changes in unemployment support policy, 1980–2004 (Germany)

Appendix A Major legislative changes in unemployment support policy, 1980–2004 (Germany)

Reforming European Welfare States
Oxford University Press

Appendix A

Major legislative changes in unemployment support policy, 1980–2004 (Germany)



1982 SPD and FDP government

  • Increase of minimum contributory period (Arbeitslosengeld, ALG) from 6 to 12 months.

  • Exclusion of additional regular earnings (e.g. overtime pay, holiday money) for calculating ALG and Arbeitslosenhilfe (ALH)

  • Increase of benefit suspension period (from 4 to 8 weeks).

  • Tighter suitability conditions.

  • Increase of contribution period (from 70 to 150 days) for ALH.

1983 CDU/CSU and FDP government

  • Lower pension insurance contributions for recipients of ALG and ALH (based on level of unemployment support rather than previous gross earnings).

  • Stricter differentiation of duration of entitlement (ALG) in accordance with contribution record (ratio between former and latter changed from 1:2 to 1:3).


  • For recipients without children: decrease in ALG rate (−5 points to 63%) and ALH rate (−2 points to 56%).


  • For employees older than 49: increase in ALG entitlement (maximum 18 months; dependent on contribution record).


  • For employees older than 43: increase in ALG entitlement (maximum 24 months for those older than 53; dependent on individual contribution record).

  • Decrease in contribution rate (to 4%).


  • For employees older than 42: increase in ALG entitlement (maximum 32 months for those older than 53; dependent on individual contribution record).

  • Ratio between entitlement and contribution period reverts back to 1:2

  • Contribution rate up to 4.3%.


  • Receipt of ALG/ALH during periods of sickness will count towards max. entitlement period.


  • Contribution rate increased to 6.8% (later 6.5%).


  • Decrease of ALG and ALH rates by 1 point (−3 points for those without children).

  • Entitlement to ALH limited to 1 year for those without prior receipt of ALG (indefinite before).


  • Decrease of benefit rate for ALH claimants by 3 points per year of claim.

  • Stricter work test imposed on ALH recipients (from 1998 also for ALG claimants). Employment office can request temporary participation in low paid seasonal jobs.


  • New suitability criteria (relevance of previous qualification dropped; suitability of job offers defined merely in monetary terms; after six months any job is deemed suitable with net earnings higher than benefit). Proof of active job search required; benefit for claimants with redundancy money curtailed, stricter benefit sanctions introduced.

  • Longer ALG duration restricted to over 45‐year‐olds (previously over 42); maximum of 32 months only for 57‐year‐olds (previously 54).

  • Participation in approved training no longer recognized as equivalent to insured employment (i.e. no longer establishes benefit eligibility).


  • Eligibility to ALG requires actual contribution period (‘equivalent’ periods no longer acceptable).

  • Introduction of ‘reintegration contract’ stating responsibilities of job seeker and employment office.

  • Calculation of ALG level based on earnings during a longer period of employment (from 6 to 12 months before unemployment).

  • Improved entitlement for claimants who accept less well paid job (and then become unemployed within three years) and for those who lose part‐time job.

2000 SPD and Green government

  • Reversal of legislation from 1982: additional regular earnings (e.g. overtime pay, holiday money) once again included for calculating benefits (but not for ALH).

  • ALH (for those without prior receipt of ALG) abolished.


  • Stronger activation focus as part of Job‐Aqtiv legislation (job placement, profiling, job search vouchers, temporary work options, job rotation, training).

  • • Automatic annual deduction (by 3%) of ALH suspended by up to two years if claimant takes part in relevant training course.


  • Tighter suitability criteria for younger unemployed; new job placement and counselling instruments; new options for business start‐ups; temporary work placements.

  • In disputed cases, proof for acceptability of job offers transferred from employment office to job seeker.


  • ALG duration fixed at standard maximum 12 months (from 2006).

  • Extended entitlement to ALG curtailed from maximum 32 months to maximum 18 months and restricted to claimants aged 55 or older.

  • Reference period for required contributions shortened from 3 to 2 years before unemployment.

  • Participation in subsidized employment no longer acceptable as benefit qualification period.

  • Wage subsidy and pension credits introduced for unemployed above the age of 50 who accept lower paid job.

  • Introduction of ALG II (2005): ALH and social assistance (for employable claimants) merged into a single scheme (abolition of earnings‐related benefits, lower rates for majority of previous ALH claimants). Tighter job suitability criteria for ALG II recipients (any legal work and wage level suitable even if below collective wage agreement or standard wages paid in locality) (from 2005). Young unemployed (under 25) only eligible for ALG II if they accept offers of training, suitable employment, or other job integration measure.

(p.196) (p.197)