Austria: Employers propose big changes in unemployment assistance based on the German model

An employers' group proposal for radical cuts in the unemployment benefit system, following the German Hartz IV model, triggers conflict between the social partners.

One of Austria's main employers' organisations has proposed harmonising unemployment assistance and social assistance, sparking another major quarrel with the unions. The president of the Federation of Austrian Industry (IV), Georg Kapsch, made the suggestion at a press conference, where he also stated that 'social partnership in its current form is dead'. The proposal was echoed some days later by the general secretary of the organisation, Christop Neymayr.

At present, an individual can draw unemployment assistance if they have exhausted unemployment benefit (after 20–30 weeks) and not found employment. Unemployment assistance amounts to 92%–95% of their unemployment benefit and has no time limit. Social assistance (known since 2010 as needs-based minimum benefit) is not linked to unemployment benefit, is paid at a much lower rate (€828 in 2015) and is means-tested (over €4,000). The proposal from IV is based on the Hartz IV reforms in Germany, which the employers' group argues should be implemented in Austria too.

The Austrian unions sharply rejected the proposal, arguing that it would subvert the logic of social insurance (unemployment benefit and assistance as a right based on the unemployment insurance contributions of workers). From their point of view, the proposal would turn the unemployed into alms recipients and force them to accept precarious and poor jobs.The Chamber of Labour has also criticised the suggestion of implementing of Hartz IV in Austria, claiming that it would contribute to an increase of the at-risk-of-poverty rate.

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