Germany
How Services for Homeless People
Survived Welfare Reforms
Dr. Volker Busch-Geertsema
GISS – Association for innovative Social Research and Social Planning
Bremen, Germany. Coordinator of the European Observatory on Homelessness
Homeless Action Scotland
The 14th National Homelessness Conference
Edinburgh, 21st November 2013
Outline of Presentation
Services for Homeless People in Germany: How They Are
Organized and How They Are Financed
Welfare Reforms in Germany: Two Waves
The Fears
Results of the Reforms in Practice (for Homeless People and
for the Services Supporting them)
Conclusions: Surviving Welfare Reforms
Services for Homeless People in Germany: How
They Are Organized and How They Are Financed
No right to housing, but a strict duty of municipalities to
provide temporary accommodation to persons who would
otherwise be roofless
Homeless paragraph: Sections 67ff of the Social Code (SGB
XII) provides an individually enforceable right to every citizen
“in special social difficulties” to receive support in order to
overcome such difficulties. Basis for financing NGO services.
Services for homeless people are to almost 95 % financed by
municipal or regional funds. Income from donations and
voluntary work much less relevant than in the UK
National legislation sets the duties, but municipalities and
regional authorities pay for the services.
Welfare Reforms in Germany: Two Waves
Most well known: Hartz Reforms, introducing workfare
elements in Germany and abolishing “unemployment
assistance” related to former wages (became law in 2005)
Less well known, but particularly relevant for NGO services:
Change of financing system from annual project funding
covering the actual costs of a complete service to funding of
individual services per person (reform in the late 1990s).

Only registered services can provide services. Contracts on
content, scope, quality and price of services are precondition

Only services delivered individually in practice are paid for, but
room for some profits exist if capacities are fully used


Introduction of market elements
Increase of competition
The Fears
Fears concerning the first reform

Increase of competition could lead to a serious threat for some
existing services

Greater economic risks when existing capacities are not fully
used, but personnel has to be paid for
Fears concerning the Hartz reforms

Subsistence benefit now covers much larger share of German
population. Rents are fully covered but only as far as they are
“reasonable”. Guidelines for what is “reasonable” are decided
by municipalities. Where ceilings would be very rigid many
households would be forced to move to homes with lower
rents (segregation effect) or would risk to accumulate rent
arrears and eventually eviction
The Fears
Fears concerning the Hartz reforms

New sanctions: in repeat cases they can also cut the housing
allowance; young people under 25 may have all benefits cut by
100 per cent when they face a second sanction.
Fear: increase of homelessness because of sanctions

Change of responsibility for employment and training for those
on subsistence benefit. Jobcentres are responsible and this
part of their task is organised and financed by a central
government organisation (Federal Employment Office).
Fear: change of responsibility would lead to closure of
adequate projects for homeless persons

Split of responsibilities for prevention measures (assumption of
rent arrears). Jobcentre is responsible for those who are
“employable”; local social services for the rest.
Fear: households imminently threatened with eviction would
not get quick support as needed
The Fears
Note that most fears related to increase of risks and problems
for poor and unemployed households, less to the existing
services for homeless people (except special employment
services for this target group)
Cynical comments foresaw good prospects for homelessness
services in the future because the potential clientele would
grow
Basis for financing homelessness services remained basically
the same
Results of the Reforms in Practice
Hartz reforms were basically an important move in Germany
from the “conservative” welfare regime (aiming at securing
the standard of living for those who have worked in times of
unemployment, illness and old age) towards the “liberal”
regime (aiming at providing a basic safety net for the poor).
Those who suffered most losses were those who had been
slightly better off thanks to “unemployment assistance”
before: Those who had held a job and had paid social security
contributions before becoming unemployed. Many new
hardships for this group (subsistence benefit generally lower
than before, have to accept every job offer after some time)
Poverty has increased despite decrease of unemployment in
recent years; recent economic boom had little impact on large
share of long-term unemployment
Results of the Reforms in Practice
Homelessness has NOT increased in the first years after
implementing the reforms

Municipalities more reluctant than expected in setting low
ceilings for “reasonable rent”, but large local variation and
dependent on local struggles; courts set clear guidelines for
defining adequate ceilings; quite a number of households pay
part of their housing costs from their benefits meant to cover
their minimum subsistence

New regulations for direct payment of housing allowance to
landlords (important impact on risk of rent arrears)

Sanctions still matter of heated debates; often decrease the
subsistence level, but impact on acute homelessness limited

Housing market development important factor, not directly
related to welfare reforms (demographic developments,
shrinking populations in many cities etc.)
Homeless persons who are temporarily accommodated under the
police law (Ordnungsbehördengesetz) in North Rhine-Westphalia,
30.6. each year (1986 - 2011)
clients of
NGO services for
homeless people
+6,3
Source: Landesamt für Datenverarbeitung und Statistik Nordrhein-Westfalen
Results of the Reforms in Practice
Prevention efforts in many cities strengthened despite more
complicated regulations of responsibilities
Increase of floating support for re-housed homeless people
but also for securing sustainability of preventative risk
interventions. New action fields for NGO services for
homeless people (prevention)
Cooperation with job centers has become increasingly
important and is not free from conflicts and frictions (struggle
who has the lead, barriers to access case workers…..)
Increased competition and emphasis on quality of services
also had some positive effects, though burocratic procedures
(absorbing a lot of time and effort) are often deplored
Results of the Reforms in Practice
Probably less adequate employment and training opportunities for homeless people than before the reform, but again
large local variation
Particular problem: Young people under 25: normally not
entitled to housing assistance outside parental household;
severe sanctions for those not cooperating with job centers;
«Bermuda triangle» between youth welfare services, job
centres and services for homeless people. For the first time
citizens with no right to subsistence benefit (after sanctions)
Long-term trend towards increased segregation because of
ceilings for reasonable rent costs. Steady pressure on municipal budgets for housing assistance (main part of municipal
share of social assistance; rest is paid by Central Government)
Conclusions: Surviving Welfare Reforms
Serious consequences of welfare reforms in Germany

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A harsh increase in inequality in German society


A record of successful court cases against jobcentre decisions
Sanctions for more than 500,000 unemployed persons per year
Very frequent deductions from a low minimum benefit (because much support is only given in form of a credit to be deducted from the subsistence benefit in the following months)
Operational problems: Severe problems to reach case workers
at job-centres, administrative barriers for realising claims,
complicated application procedures, a completely overstrained
software system, poor people left with no support at all
because they forgot to renew their application for
unemployment assistance……
Conclusions: Surviving Welfare Reforms
Serious consequences of welfare reforms in Germany
(continued)

Sharp increase of insecure and precarious jobs with low pay
(Germany still has no minimum wage)

Little chances for long-term unemployed people for (re-)insertion into regular employment

An increase of young homeless people (often sofa surfing and
not provided with adequate support)

…..
Despite the serious consequences of welfare reforms in
Germany services for homeless people survived these reforms
pretty well
Conclusions: Surviving Welfare Reforms
Welfare reforms in Germany brought market elements and
increased competition to services for homeless people, with
disadvantanges (more bureaucracy, more financial insecurity)
but also some advantages (increased definition and control of
quality of services)
The Hartz reform indicated a gradual move from the
conservative to the liberal welfare regime, from wage related
transfer payments to a basic safety net for poor people with
workfare elements
They have hit mostly those who before the reforms were
slightly better off than recipients of subsistence benefits,
resulting in higher poverty rates and an increase of long-term
unemployment
Conclusions: Surviving Welfare Reforms
As most homeless people were reliant on subsistence benefits
before the reforms the changes were not as serious for them,
though they have been suffering under the stricter sanctions
and the lack of adequate measures to provide employment
and training for this particularly marginalised group.
The increase of poverty and sanctions, the increase of the
overall amount of people who will get their housing costs only
paid as far as they are deemed “reasonable” have not led to
an increase of homelessness, other factors have rather led to
a decrease until recently (slackening of local housing markets;
varying, but sometimes careful setting of rent ceilings and
careful use of sanctions; improvement of prevention
measures)
Conclusions: Surviving Welfare Reforms
Local struggles over ceilings for “reasonable” housing costs
and for improving prevention measures had an important
impact on lowering the risk of increased homelessness
While the welfare reforms have brought hardship to a large
number of people, homeless services have not really suffered
much from their consequences, with the exception of some
employment services
Despite all the serious consequences services for poor people
NGO services for homeless people survived welfare reforms
pretty well
Conclusions: Surviving Welfare Reforms
I cannot really compare welfare reforms in Germany and the
UK. My impression is that while the German welfare system
moved a step towards the UK regime, the UK welfare regime
is moving a step towards the US, both not being very positive
moves in my view.
But you can be sure: There will be a life after welfare reforms
and it makes sense to work and fight against the greatest risks
at the national level as well as at the regional and local level.
My best wishes for success in this daily struggle!
Thank you for your attention!
Contact
Dr. Volker Busch-Geertsema
Gesellschaft für innovative Sozialforschung und
Sozialplanung e.V. (GISS, Association for
Innovative Social Research and Social Planning)
Kohlhökerstraße 22
28203 Bremen, Germany
Fon: +49-421 – 33 47 08-2
Fax: +49-421 – 339 88 35
Mail:
Internet:
vbg@giss-ev.de
www.giss-ev.de