The Austrian Means-Tested Minimum Income (BMS): Supportive Arguments and Obstacles

1. The Austrian means-tested minimum income „Bedarfsorientierte Mindestsicherung“ (BMS) Martina Kargl (EAPN AUSTRIA / Caritas Vienna) EMIN-Conference BUDAPEST September 2014

2. means-testedminimumincomes& theAustrian welfarestate

3. Which have been the supportive arguments and, on the other hand, obstacles for the introduction of MIS in Austria?What about the political context?

4. INTRODUCTION? NOT a new cash benefit, but reform of an already existing one !!! Sozialhilfe social assistance, since the 1970ies (dating back to 19th centuries „poor relief“) Bedarfsorientierte Mindestsicherung since 2010  Some modernisation & improvement, but also deterioration and unsolved problems.  formative elements are still the same!

5. Supportivearguments • Noneedtointroduce a new cash benefit– just „reform“ • Lobbying by EAPN Austria sincethe 1990s – minimumincomeas an importanttopic in thepublicdebateaboutpoverty • BUT: NGOs wereexcludedfromthenegotiationsbetweenfederalstate & Laender (2006-2010), rare informationaboutongoingnegotiations • Federal Government: • Acknowledgementofchangingsocialrealities (riseofunemployment, atypicalwork, workingpoor, single-parents, …) andtheneedtoreformthesocialsystemtoavoidpovertybythefederalgovernment • Will tointroducecostyimprovements in the 1stpillaroftheaustrianwelfarestate (unemployment-insurance, health-insurance) toreducetheburdenon the 2ndpillar– preconditionfortheLaendertoagreetoanyreform! • Fight againstpoverty: maintopic in thegovernmentprogramme 2006 & strong (personal) supportbytheministerofsocialaffairs

6. OBSTACLES • Austria is a federalstate, constitutionrules: „poorrelief“ falls intothe legislative competenceofthe „Laender“ • Laenderrefused a federallawand real harmonisation: „Who paysthepipercallsthe tune“ • Different interestsoftheLaender(f.e.: Vienna  Kärnten) • BMS isbased on a treatybetweenfederalstateandthelaender, not on a law. Treaty onlystatesminimum-standards. • Still 9 different laws, whichmeans:9 different standardsconcerningtheamountofthe BMS, rights & duties

7. Federal Government = Coalition Government of Social-Democrats and Conservative Party  Conflicting interests & ideologies  reform took years! • Conflicting interests not only between federal state & Laender, but also within the federal government and between relevant ministries

8. Minimum income & the obligation to work

9. BMS & WORKFARE • less-elegibility-principle: Thereisnostatutoryminimumwage in Austria • 10% oftheemployeesworkingfull time earnlessthan1.199 € netper month(twelfthsofannualearnings, 2012) • BMS is NOT a unconditionalbasicincome dutytowork!Otherweise: reduction/cancellationofthebenefit • BMS servesminimumincome not onlyforpeopleabletowork but also for … … disabledpersons= peoplewithseriousimpairment,usually not abletowork … children (27%, incl. disabledpersons) … people in retirementage(8%)

10. provisions on reasonable entitlement are those of the unemployment insurance • Offered job must be based on an employment relationship • Payment must fit collective agreement • No occupational protection after 100 days of unemployment / No safeguarding of payment after 120 days • People who have to care for children up to the ageof 10 years: at least 16/20 hours per week • Duty to participate in active labour market measures

11. Exemptions from the duty to use one‘s workforce do exist • People in retirement age (men: >65 years, women: >60 years) • People who have to care for children up to the ageof 3 years who can‘t work because there are no child-care-facilities • People who care for family members who have a proofed need for intense long term care • People who care for dying /terminally ill family members • People who started a vocational training / high school before the age of 18

12. Sanctions • Benefitsforlivingrequirements:maybereducedupto 100% • Benefitsforhousing:must not bereduced! • benefitsforfamilymembers(children, partners):must not bereduced! • mutual assistanceamong BMS-authorityandthepublicemploymentservice (AMS), datainterfaces • People sanctionedby AMS won‘treceiveBMS • People not willingtocooperate in activelabourmeasureswon‘treceive BMS

13. Problem: high unemploymentpredatorycompetition on thelabour-market& disappearanceoflow-skilledjobs ManyPeople judgedtobe „employable“ are not attractiveforemployers(healthproblems; low, outdatedormissingskills; careresponsibilities; indeptedness; oldage …) • In manycases: Nolongtime-integration intothelabour-market, revolving-door-effekts • German exampleshows: „zero-tolerance“ workfarepolicyleadsto a growingworking-poor-sectorandspread in wages, growingsocialinequality& weakdomesticdemand Not themissing will toworkistheproblem, but the lack ofadequatework!

14. BMS & ADEQUACY

15. Amountofentitlement in the BMS isdefinedbytheamoutofentitlement in the Ausgleichszulage in thepensionsystem • BUT:arbitrarilysetbypoliticalsystem, historicallyevolvedsince 1950ies – politicalpovertylines in Austria are not based on a basketofgoods / referencebudget ! • Nopoliticalconsensusthatthe BMS should at least beas high astheminimumincomewithinthepension-system (strikingargument: otherwiseweakincentivesfortakingup a job)  Ausgleichszulage (pensionsystem): 2014: 814 x 14 = 11.396 € / year  BMS: 2014: 814 x 12 = 9.768 € / year

16. Reference budgets for Austriawww.referencebudgets.eu/budgets/ • Assumtion: Rented flat • Periodicexpenditures: housing & relatedexpenditures, publictransport, phone & internet, household-insurance, school-relatedcosts, child-care-costs(kindergarden etc.) • Irregularexpenditures: clothes& shoes, furniture & garden, health-relatedcosts • Householdexpenditures: Healthynutrition, cleaning & bodycareproducts, child-needs (trips, handicraftingetc) • Other expenditures Pocket moneyforchildren, budgetforsocial und culturalparticipation(2013: singleperson: 61 €/month) • NOT included: costsfor … carand car-relatedexpenditures, pets, leisure-time relatedexenditures (hobbies, going out, holidays), alcoholandcigarettes

18. Most obviousproblem in thecontextofadequacy: inadequatemeansforhousing General Rule: • 75%ofthebenefit per person: livingrequirements(2014: 611 €) • 25%ofthebenefit per person: housing (2014: 204 €) • Healthinsuranceforpeoplepreviously not healthinsured someLaenderoffer additional benefitsforhousing … • but not all ofthem • Meansforhousingnonthelessoften not adequate

19. Eligibilitycriteria

20. Citizenship / residencepermit • Austrian citizenship • EU-citizens: requestedresidencepermit: „Anmeldebescheinigung“  statusofworkerorproofofsufficientmeansofliving & healthinsurance • Third-country nationals: permanent residencepermit • Not fortourists (lessthan 3 monthstay in Austria)! • Not forpoverty-drivenmigrants! Same conditionsforsheltersforthehomeless!(at least in Vienna)

21. Subsidiarity • Dutytowork • compulsoryrealisationofassets/ safingsNEW: • perpetual „grace-property“: ~ 4.000 € • „graceperiod“ fordwellingsownedbeforesecuring in thelandregister: 6 months  importantreasonfor non-take up • Claims to maintenance (under family law) have to be realised • Separated, but married couples – partners (not married) in the same household are treated like spouses. NOT: if unreasonable, f.e.: domestic violence – proof! • If loss of “self-preservationcapacity“ (jur): Parentsof adult childrenand vice versaareobligedto care fortheperson in need  importantreasonfor non-take up

22. Who benefits from the BMS?

23. Recipients of Sozialhilfe (till 2010) and BMS (since 2010)

24. (Non)-take-upNOTE: not everyone living below EU-SILC poverty-line is eligible to BMS!

25. BMS-Recipients in Austria 2012

26. BMS-recipients in Austria 2012

27. Average duration of BMS-benefit

28. BMS-recipients according totype of benefit, VIENNA, 2013

29. COSTS • BMS-spending 2012: ~ 540 Mio € (66% = Vienna!), • Overall socialspending in Austria 2012: 92,7 Billion € (socialexpenditureshare: 30,4% of GDP)  BMS-spending = 0,6% ofoverallsocialspending!

30. Special problems • not sufficiently determinated laws  leaves too much discretionary power to the officials • Not only 9 different laws, but also inconsistent law enforcement by the district-offices due to not sufficiently determinated laws & poorly trained officals  diverging standards! • Financing: to a large part responsibility of the municipalities – the poorer the municipality is, the more costs it has to bear  outdated financing-structure that incourages unlawful law-enforcement and wrong information • Insufficiant (legal) counselling-centres & information offer, both in quantity & quality  difficult for entitled persons to get to know about their rights & to enforce them

31. Activities of EAPN Austriaconcerning BMS Followingtheinvitationsbypoliticiansandofficalsfordialog, but also activities on ourown behalf See: www.armutskonferenz.at  Mindestsicherung • Carrying out researchandpublishingit • 2008: Survey among 121 social NGOs concerning BMS- law-enforcement in Austria (showingthatthereisunlawful & non-uniform law-inforcement) • 2012: comparativestudyofthe 9 new BMS-laws (showingthattherearevastedifferences & a lotofremainingproblems) • 2014:„lemon-award“: startof a newseriesconcerninggood & badpractice in BMS-lawandlaw-enforce- ment Making problemspublic! Media-interest!

32. Thankyouforyourattention! www.armutskonferenz.at Contact: office@armutskonferenz.at martina.kargl@caritas-wien.at