In Coma and Looking for Work

German Chancellor Gerhard Schröder's controversial "Hartz IV" reforms, which triggered angry protests across the country last year, is once again at the center of a row after a relatively calm couple of months.

The reforms, named after Peter Hartz, personnel director at Germany's biggest carmaker Volkswagen, replaces the previous two-tier system of unemployment benefits and welfare support for the long-term unemployed with a single flat-rate payout.

That means that starting this year people formerly on the dole that are fit to work, are now given handouts by the government in Berlin. However, if they aren't capable of working for whatever reason, then it's the local authorities in towns and cities who have to shoulder the financial responsibility and pay them welfare benefits.

A job for a terminally-ill patient?

This week it emerged that several towns and cities in Germany had apparently decided to interpret the new labor regulation to their own advantage to avoid shelling out millions.

Local authorities classified more than four million social welfare recipients obviously unfit to work -- among them old pensioners, children and terminally ill people with cancer and Aids as well as some lying in a coma -- as fit to work and registered them last year with job centers.

German ARD television reported earlier this week of a surprised severely-ill cancer patient who had received a letter from a job center, informing him they had found a job.

The news of the abuse has angered German Economy and Labor Minister Wolfgang Clement, who on Thursday described the absurd situation that the fudging of the new reforms had led to.

"We're received calls from health insurance companies telling us that we're looking for jobs for comatose people, heavy addicts and Aids patients," Clement said. "We've even realized that in Berlin, students and homeless people have been labeled fit to work. The record at the moment is an 84-year-old man."

Insurance companies upset

Health insurance companies, who are responsible for providing cover to social welfare recipients fit to work, have also been hit by the affair. The insurance companies receive a flat-payment of €125 per person from the government in Berlin, which only covers a part of the high costs of the health system.

With local authorities and social centers now shirking their healthcare responsibility for people on the dole and unable to take up a job, insurance companies faced with a rising number of seriously-ill jobless patients, are reporting cases of abuse.

On Thursday, a spokesman for an insurance company in Bavaria said that a paraplegic who needed nursing and cost the insurance company €75,000 a year was now categorized as fit to work as was a cancer patient, who was terminally ill and confined to his bed.

Towns reject abuse allegations

However, local authorities have denied allegations that they deliberately tried to dodge their financial responsibility towards social welfare recipients incapable of working.

"We reject the accusation that we illegally tried to do that," said Gerd Landsberg, president of the German Association of Towns and Communities, "The law clearly says that those able to work more than three hours are considered fit to work. And there are definitely Aids patients and addicts who can fulfill this criterion," he said.

Reports emerged Friday that local umbrella associations were aware of the abuse for a long time and that some health insurance companies had written letters to the German Economic Ministry and the Federal Labor Agency, drawing attention to suspicious cases. The government is now set to investigate whether it didn't sufficiently examine applicants' capability of working before sanctioning handouts.

Exploding costs

Meanwhile, the whole affair is expected to blow quite a hole in the federal government's budget. Clement's ministry had originally calculated that the "Hartz IV" labor reforms would cost it €14.6 billion for an estimated 3.4 million long-term jobless. Now the government will have to pick up the tab of a further €6.4 billion for the additional 640,000 long-term unemployed.

The conservative opposition has already seized upon the issue as proof that Chancellor Schröder's government miscalculated the costs of the labor reforms.

"The estimates of the government have nothing to do with reality," Dietrich Austermann, budgetary spokesman of the Christian Democrat parliamentary group told daily Passauer Neuen Presse.

The Free Democratic Party's social expert Dirk Niebel suggested the government deliberately falsified statistics. "Clement is just hiding behind coma patients and paraplegics," he said.