BERLIN, Oct 8: Changes to German unemployment benefit rules introduced at the beginning of this year are set to cost the government almost twice as much as expected in 2005, the Economy Ministry said on Saturday.
The federal government will pay out 26bn euros ($31.6bn) in a new form of jobless benefit this year, more than the 14.6bn euros originally set aside in the budget, a ministry spokesman told Reuters.
Welt am Sonntag reported earlier in a preview of its Sunday edition the government would have to spend 29 billion euros in 2005, rising to 31.5 billion next year.
The 31.5 billion figure for 2006 was wrong, the ministry spokesman said.
Economy Minister Wolfgang Clement gave the figures during talks last Wednesday between his Social Democrats (SPD) and the opposition conservatives (CDU/ CSU) on forming a coalition government, Welt am Sonntag, citing unidentified sources who attended the meeting.
The Finance Ministry had already at the beginning of July set aside an extra 8 billion euros to cover higher-than-expected spending on the new jobless benefit.
To try to rein in spending, Clement is planning to tighten controls over who receives unemployment benefit, according to weekly magazine Focus.
The Federal Labour Office is assigning 400 workers to check claimants are legitimate, Focus reported.
The Economy Ministry also wants to step up house visits and telephone checks to help prevent abuse, according to Saturday’s Berliner Zeitung.
Welt am Sonntag also reported that Clement told Thursday’s meeting he expected the number of jobs paying full social security benefit to decline by 400,000 this year and a further 200,000 in 2006.—Reuters
