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Agena 20109/28/2023 ![]() ![]() The cut is expected to save taxpayers a total of €21.8 billion. The reform will change the country’s progressive tax rate from 19.9 percent to 15 percent at the lowest level and from 48.5 percent to 42 percent at the highest level. The third phase of a previously approved German tax reform would be bumped up to 2004 from its originally planned implementation in 2005. A person may not be eligible to receive this second unemployment benefit if they have a working spouse or has assets exceeding €13,000. Unlike the current benefit for the long-term unemployed, which pays out as much as 57 percent of a person’s last regular net income, the new benefit would be capped at €345 in western Germany and €331 in the east. ![]() Under the plan, unemployed persons capable of working would be given what the government is describing as "Unemployment Benefit II" after their eligibility for unemployment runs out. The Hartz IV Law calls for unemployment and welfare benefits to be merged and spur those without a job into action. The office would also have the ability to dock benefits for people who refuse to take employment. The law also requires companies to immediately inform the office if an employee has been given notice and to free up employees for job hunting so they can find other work before they become unemployed. The office will be modeled after a private placement agency and rechristened as the Federal Job Agency, with responsibility for managing unemployment benefits and finding placements for jobless. Older employees, however, could receive unemployment benefits for up to 18 months.Ī crucial component in the government’s reform package, passed in an effort to reduce unemployment, is a massive reorganization of the Federal Labor Office. It reduces to 12 months the maximum duration a person can receive unemployment benefits after losing a job and also makes it easier for companies to hire and fire employees. 26 seeks to make Germany’s heavily regulated labor market more flexible. The reforms are expected to save insurance companies up to €20 billion.Ī second reform bill passed on Sept. To finance the cuts, the public health fund will no longer finance dentures or replacement teeth and will require a patient co-pay for doctor visits and prescriptions. As health insurance payments are split by employers and employees, the reduced premium is aimed at lowering Germany’s staggering non-wage labor costs. 26, Germany’s parliament, the Bundestag, passed a law that would reduce monthly premium payments for the national healthcare system from 14.3 percent of an employee’s income to 13.6 percent next year and 12.15 percent by 2006.
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