An impressive film by Ken Loach encourages us to critically question the neoliberal “agenda reforms” in Germany
“Me, Daniel Blake” is the name of Ken Loach’s film, which was awarded the Palme d’Or in Cannes in 2016. Now in the Corona times, when the cinemas are also closed, I watched this startling social drama again via video at home and was deeply moved.
The main content is briefly told. Daniel Blake is an average Englishman, a skilled worker and trained carpenter who loses his job due to a heart attack and therefore applies for social assistance. But the state bureaucracy at the social welfare office takes a stand and denies him financial support. He quickly finds himself in a vicious circle of responsibilities, regulations and application forms. During one of his frequent unsuccessful visits to the job center, he suddenly dies in the toilet, probably from heart failure caused by the stress he experienced.
The answer shows to a terrifying extent how our “welfare state” has been affected by the neoliberal “Agenda reforms” of the last 20 years, especially by the new pension laws from 2001 and Agenda 2010, which was led by the red-green government in 2003 by Gerhard Schröder (SPD) and Joschka Fischer (Greens) was set in motion, dismantled and largely destroyed.
In what kind of society do we live in Germany today? I have made the experience that, particularly in the last 20 years, the Federal Republican capitalist society of the first decades after 1945 has undergone a profound socio-political change and has transformed itself into a “neoliberal” capitalism.
As is well known, the goal of neoliberalism is the implementation of free-market order mechanisms without taking into account the people affected by deregulation (reduction of state influence on the markets), privatization (of public property) and social cuts (for dependent employees).
The result of this social development, which is already well advanced today, can be seen everywhere: Another favoring of the rich with a redistribution of social wealth from the bottom up
This development can be exemplified by the possible fate of a “Daniel Blake” in Germany
Sick pay and sick pay
As a skilled worker, “Blake” would probably also belong to the middle class in Germany. In the event of illness, for example after a heart attack, he has been entitled to continued wages since 1970 for up to six weeks after the start of sick leave with a gross wage of 100 percent.
It should be remembered that in order to achieve this goal the unions carried out a bitter strike that lasted 116 days in 1956 and were ultimately successful. That is probably the main reason why these provisions have not yet been touched.
After the wages have expired, “Blake”, as a member of a statutory health insurance scheme, is entitled to sick pay for up to one and a half years, but only to a maximum of 90 percent of the last monthly net earnings. In the time before the “Agenda reforms”, sick pay was still 100 percent of the last net earnings. It has thus been cut by ten percent.
Unemployment benefit I
“Blake” can apply for unemployment benefit after the period of sick leave and further unemployment. He is initially entitled to unemployment benefit I. This amounts to 60 percent (for single persons) or 67 percent (with children) of the last monthly net earnings.
In the event of prolonged unemployment, he will find that the duration of this benefit has been significantly reduced from earlier to 32 months. It is only granted for a maximum of twelve months (previously 24 months) to those under 50. For people over 50 years of age, the benefit period increases to a maximum of 24 months at the age of 58.
Unemployment benefit II and social benefit
He will also find that the unemployment benefit to which he was previously entitled following the unemployment benefit has been completely canceled. This amounted to 53 percent (for singles) and 57 percent (with children) of the last net salary, was unlimited in time, with fewer requirements and sanctions and, like unemployment benefit II today, was financed from tax revenues.
Unemployment benefit has been replaced by unemployment benefit II and social benefit (for relatives under the age of 15 who are unable to work), also known as Hartz IV. Unemployed people receive this according to unemployment benefit I if they are able to work and in need of help. It is a basic security benefit for the unemployed.
Unemployment benefit II and social benefit correspond to the level of social assistance and consist of 3 components: standard benefits (2021: 446 euros for a single person), costs for rent and heating (up to a specified maximum) and additional needs in special situations upon request.
One of the provisions relating to unemployment benefit II is that your own income and assets – up to a small exempt amount – are taken into account. Furthermore, at the required regular presentations in the job centers, pressure can be exerted on the unemployed to accept any job, whereby violations must be punished with sanctions up to the complete withdrawal of unemployment benefit II (including rent and heating).
The re is a statutory automatism that does not allow the circumstances to be taken into account. In 2016, 641,000 Hartz IV recipients were affected by 940,000 sanctions, a third of whom had children
Although the number of those affected by Hartz IV has risen sharply from 4.3 million to 5.6 million4, according to the Federal Employment Agency, the number of objections and lawsuits has fallen sharply compared to the same period of the previous year. With the associated children, millions more people are affected by Hartz IV. In 2016, it was found that a third of them suffered from mental health problems such as depression and anxiety disorders
After a long period of sick leave, the family doctor will recommend the German “Daniel Blake” to submit an application for a disability pension.6 As the principle of “rehabilitation before pension” applies in the German pension insurance system, admission to a rehabilitation clinic takes place now at the latest.
The outcome of this depends on whether the person concerned is eligible for a disability pension. Since I recently found myself in a separate article in Telepolis have dealt extensively with the statutory provisions for disability pensions that have been in force since 1.1.2001, I refer here to this article
Upon reaching retirement age, “Blake” can apply for the regular old-age pension. This is tied to two conditions, the fulfillment of the general waiting period of five years (minimum insurance period) and the completion of the 65th birthday plus x months (due to the gradual increase of the age limit from 2012 to 67 years born in 1947 by one month per Year).
An earlier retirement age at 63 years of age without deductions or at the age of 60 (under certain circumstances with deductions of up to 10.8 percent) is only possible for severely disabled persons (old-age pension for severely disabled persons) and requires corresponding recognition in accordance with the Disabled Persons Act.
The previous old-age pension due to unemployment or partial retirement from the age of 60 has now expired.
In 2019, the average gross monthly old-age pension in Germany in the old federal states was 1,139 euros for men and 710 euros for women and in the new federal states for men 1,212 euros and for women 1,023 euros.
Since retirees also have to pay health insurance contributions of 7.3 percent and long-term care insurance contributions of 3.05 percent, you can expect a net pension of between EUR 950 and EUR 1,000 with a gross pension of around EUR 1,100 . In addition to these contributions, taxes are also due on the pension if it is above the annual basic tax allowance of 9,744 euros (as of 2021).
Due to the lowering of the pension level in the last decades, which amounted to 1,985 57.5 percent and in 2000 53 percent of average net earnings, to 48 percent (2019), “Blake” can expect a significantly lower old-age pension than before.
Due to the introduction of the Riester and sustainability factor (so-called damping factors), there have been significant pension cuts in recent years, which will increase if the pension level is further reduced to 43 percent of last net earnings by 2030, as planned.8 From 2000 to 2016 the pension level has been lowered by ten percent in real terms and is to be cut by a further 15 percent by 2030. A recently published in Telepolis published article by Reiner Heyse. 9
The reason: only some of the pensioners have signed a Riester contract, whereby especially those who earn very little and can expect a particularly low pension cannot “riest” at all.
The pension level is not as low in all European countries as in Germany. In 2013, for example, a new pensioner in Austria received an average (gross) pension of € 1,580 (in Germany € 1,050) in 14 monthly payments after 35 years of contribution payments. That means that he received about 75 percent more or about 90 percent of the net earnings.
The minimum pension in Austria was 12,000 euros per year.
The pension level in Austria is significantly higher (by 70 to 100 percent), the pension system is much fairer (one system for everyone), much more poverty-proof (minimum pension) and the pensions are much more future-proof (pure pay-as-you-go pension).