Germany: ambivalent activation

This chapter discusses the key traits of reforms to German minimum income protection (2005–2012), focusing on the 2005 “Hartz IV” reform and policy responses to the economic crisis. Reforms during the early 2000s addressed entrenched problems such as “shifting yards” and inefficiencies due to the compartmentalized governance structures and unequal access to employment services. However, a number of issues prevail. The new delivery structure has not entirely overcome institutional fragmentation. Also, resource constraints appear ever more pressing as the result of austerity policies, limiting quality and quantity of employment services and increasing the relative weight of the Work First approach. More recently, as a reaction to the 2008 financial crisis, the German Government did introduce a Age Supplement and a Housing Allowance for minimum income recipients. However, signaling the changing economic environment in Europe, in 2012, the same government cut funding for benefits and services targeting minimum income recipients.