24 April 2024: AGF expert discussion on the design of financial benefits for family-related leaves or reductions in working hours

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On 24 April 2024, the AGF office hosted an expert discussion on alternative forms of financial compensation for family-related leave (such as parental allowance or the new family care allowance currently under discussion).
The discussion centred on the question of how the different design principles of such benefits are motivated, how they work and what “side effects” they have.

The reason for the expert discussion was the AGF’s involvement in the independent advisory board on the reconciliation of elderly care and work. Specifically, the need for discussion was triggered by the fact that the AGF had already written a minority opinion in two advisory board reports on the question of the organisation of financial compensation for caring for relatives. While the majority of the advisory board was in favour of structuring a new cash benefit for the planned family care leave as a wage replacement benefit, the AGF argued in favour of structuring it as a social benefit. The underlying argument is the conflict between the equality policy and social objectives of the benefit (see for example the AGF statement on the 2nd advisory board report).

The tension between the different design principles was discussed with the social ethicist Prof. Dr Jonas Hagedorn. In his keynote speech, Prof. Hagedorn emphasised the need to improve financial support for family carers in order to promote social justice and equal opportunities.

Based on an analysis of employment as a social relationship, he emphasised the importance of unpaid care work for maintaining the employment sphere. He discussed the role of solidarity in modern, functionally differentiated societies and the constitutional obligation of the state to guarantee basic rights (and a certain quality of life) for those in need of care and carers.

Using statistics on the development of recipients of care services in Germany, Prof Hagedorn emphasised the growing importance of the topic. He showed how demographic development is affecting the need to reorganise care support. Hagedorn identified several equity deficits in the current system, including the unequal distribution of the financial burden and the possible subsidisation of higher income groups through the existing cash benefits. As an alternative, he proposed an income-independent transfer income that is paid directly to carers. This would guarantee basic security regardless of the carer’s financial situation or income. He discussed various aspects of this redesign, such as different payment models depending on the level of care. He stressed the need to design the system in such a way that it supports family, non-commercial care relationships and at the same time does not provide hidden subsidies for problematic live-in care.

Hagedorn is in favour of a care allowance that can be applied for from a certain level of care and offers financial security for carers. The care allowance would be administered by the care insurance fund and financed by earmarked tax subsidies.
It is important that the care allowance also continues to be paid during periods of respite or short-term care and that a bonus is granted if the care work is shared between the partners.

To summarise, Hagedorn proposed a comprehensively reformed system that strengthens the financial and social security of carers and strives for a fairer distribution of the financial burden. The concept presented is also published in the policy paper “Double person-centredness – a guiding principle for the service mix in home care”.

The subsequent discussion with the member organisations of the AGF essentially focused on three points. Firstly, questions were asked about the specific design problems of such a system. Secondly, fundamental questions regarding the contradiction and compatibility of gender equality policy and social policy objectives were discussed. And thirdly, the current opportunities for such far-reaching reforms under the conditions of the current federal budget situation were discussed.