Germany approves welfare reform, extends nuclear power

The upper house of Germany's parliament, the Bundesrat, approved extending the use of three nuclear power plants, overhauling unemployment benefits and other major legislation on Friday after heated debate among lawmakers.

After receiving approval from the Bundesrat, the measures will soon enter into law. DW breaks down what's set to change in 2023.

Nuclear power extension

The Bundesrat signed off on the extension of three nuclear power plants after the lower house, the Bundestag, approved the move earlier this month.

The nuclear plants — Isar 2, Neckarwestheim 2 and Emsland — will remain operational until April 2023 to provide enough power through the winter. The facilities had been slated to close at the end of this year under Germany's nuclear phaseout plans.

Chancellor Olaf Scholz decided to extend the life of the nuclear plants after Germany found itself facing a severe energy shortage. Russia turned off supplies of gas in response to the backlash over Moscow's invasion of Ukraine.

The extension was bitterly debated among Scholz's center-left Social Democrats (SPD), the environmentalist Greens and the pro-free market Free Democrats (FDP).

With Friday's approval from the upper house, the nuclear power plant extension will take effect immediately.

Unemployment reform

Germany is set for a major welfare overhaul after the Bundesrat signed off on a compromise to reform unemployment benefits.

The changes will go into effect as of January 1, 2023, replacing the current and frequently criticized "Harz IV" unemployment benefits system that has been in place since 2005.

Under the new "Bürgergeld" system (which means "citizen's money"), those who are unemployed will get higher benefits and better vocational skills training.

The initial proposal by Scholz's government was rejected by conservative lawmakers in the Christian Democrats (CDU/CSU) bloc. Under the compromise, benefits could be cut during a six-month "trust period" if an unemployed person is deemed to not be looking hard enough for work.

According to the plans, those receiving benefits will also get more support in job training programs to prepare for permanent employment. The change also is an attempt to mitigate the shortage of skilled workers Germany is currently experiencing.

"This reform is a milestone of social policy in Germany," Scholz told the magazine Focus on Friday after the votes. "This reform put assistance for untrained people who belong to the long-term jobless front and center."

The measure must still be signed by German President Frank-Walter Steinmeier, although nearly all measures approved by the Bundesrat are signed-off by the president.

Tax relief, higher child benefits

With inflation hitting consumers hard, lawmakers approved measures aimed at softening the blow.

The upper house approved legislation that would help people who receive pay raises that adjust for inflation. The new measures would prevent people having to pay more taxes due to pay raises.

Starting in January 2023, child benefit payments will also be raised. Families will now receive €250 ($260) per month for each child in the household.

The change is a big jump from the current system, which saw parents receive €219 per month for their first and second child, €225 per month for a third child, and €250 for each additional child.

More support for renters

The upper house of parliament also greenlit a law that seeks to help renters deal with skyrocketing heating costs.

Starting from January 1, renters will no longer have to shoulder the costs of heating with oil and natural gas — landlords and property owners will have to chip-in as well.

For buildings that are not energy efficient and produce a high proportion of CO2 emissions, landlords will need to pay more — and not the renters.

In addition, more people in low-income households will receive a housing allowance from the government. The expansion to the law means 1.4 million households are eligible for the payments, as opposed to the current 600,000 households that qualify.

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rs/ar (dpa, KNA, epd)