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Migration and integration Society and the Constitution News 2014.08.29 Com­mit­tee of State Sec­re­taries: Cab­i­net adopts fi­nal re­port

Relief for municipalities – Measures to fight abuse of freedom of movement

The Federal Government on 27 September 2014 adopted the final report of the Committee of State Secretaries on legal issues and challenges in the field of social security claims by nationals of EU Member States, which was presented by the Federal Minister of the Interior and the Federal Minister of Labour and Social Affairs.

"Freedom of movement is an essential part of European integration, and we support it completely. However, we cannot close our eyes to the problems that come with it. The final report represents our important contribution to putting the discussion on a more objective footing; with the related legislation, we have decided on the right steps to prevent abuse of the freedom of movement and provide relief for municipalities," said Federal Minister of the Interior Thomas de Maizière.

"A great many municipalities need our help to meet the challenges created by growing immigration from other EU countries. This is why the Committee of State Secretaries devoted itself to their special situation and agreed on a wide range of financial relief measures: Already in March, we promised €200 million in additional federal funding for the municipalities that are especially hard-hit. This year we will provide an additional €25 million by increasing the federal contribution to pay for housing costs under Book II of the Social Code," said Federal Minister of Labour Andrea Nahles.

Help for municipalities especially impacted by immigration from other EU countries

In addition to the more than €200 million for especially affected mu-nicipalities recommended in the committee’s interim report, the federal contribution to pay for housing and heating under Book II of the Social Code will be increased by €25 million for 2014. Under Germany’s Constitution, the Federation is not allowed to pay financial aid directly to the municipalities, so these funds are going to the states with the municipalities most heavily impacted by immigration: Baden-Württemberg, Bavaria, Berlin, Bremen, Hamburg, Hesse, Lower Saxony, North Rhine-Westphalia and Rhineland-Palatinate. These states must then forward the funds to the relevant municipalities.

Measures in the health-care sector will provide an estimated €10 million annually in additional relief for the municipalities. Part of this relief will be provided by a planned amendment of Book V of the Social Code requiring the statutory health insurance funds to pay for vaccines for children and young people who are nationals of other EU Member States and whose insurance status is unclear at the time of vaccination.

The Federal Ministry of the Interior will provide an additional €40 million for more integration courses.

When it enters into force on 1 April 2015, the reform of the Act on Benefits for Asylum Seekers will also offer relief for the municipalities estimated at €31 million in 2015 and €43 million in the following years.

As recommended in the committee’s interim report, the urban reconstruction and development assistance programme "Socially Minded City" (Soziale Stadt) and the programmes of the European Social Fund (ESF) and the Fund for European Aid to the Most Deprived (FEAD) will be tailored to the local situation and funded appropriately:

  • roughly €10 million for especially affected municipalities out of the €150 million for the “Socially Minded City” programme in 2014;
  • €88.3 million for FEAD in the funding period 2014–2020;
  • up to €116 million for the three ESF programmes (Promoting youth close to home, BIWAQ and the federal integration guideline) in the funding period 2014–2020.

Taking current immigration trends into account, in late 2014 the Federation will assess whether the planned measures provide sufficient relief for the af-fected municipalities or whether additional support will be needed in 2015.

Guaranteeing freedom of movement – preventing abuse

The overwhelming majority of Union citizens in Germany makes use of the freedom of movement in compliance with applicable national and European rules. We must effectively prevent abuse of the freedom of movement. Keep-ing this freedom means ensuring its acceptance by the public. This is why it is so important to take effective action against abuse of this right.

The committee’s final report and the draft legislation call for the following measures in particular to fight abuse:

  • National law on freedom of movement will enable temporary re-entry bans to be issued in case of violations or fraud; the right of residence to seek employment will be made temporary in line with European law; and obtaining residence permits under the Freedom of Movement Act/EU by fraudulent means will become a criminal offence.
  • To fight fraud and abuse in the area of family and child benefits, the In-come Tax Act will be amended to require those applying for benefits and their children to provide tax identification numbers to verify their identity and prevent multiple payments.
  • Administrative instructions for family benefits will be made more specific and in some cases stricter, for example regarding entitlement to freedom of movement, limits on the length of time unemployed Union citizens may receive benefits and the requirement to provide proof of the child’s existence. Amendments to adjust child benefit amounts to the cost of living where the child lives are also being considered.
  • The new measures are intended to keep the freedom of movement from being misused under cover of gainful employment. At the same time, im-migrant workers must be protected against exploitation at work, and effective action must be taken against fictitious self-employment.
  • A new business registration ordinance already requires applications for business registrations to be checked for signs of fictitious self-employment. Cooperation with the Federal Customs Administration unit responsible for enforcing the law on illegal employment and benefit fraud will be expanded, and additional authorities responsible for fighting illegal employment will be included in the catalogue of cooperating authorities, thereby anchoring rights and duties in the law.

The entire final report (in German) and a summary (in English) are available for download.

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