I.Many traps lurk in Germany – the poverty trap, the part-time trap, the debt trap. According to the Bertelsmann Foundation, there is also a “second earner trap”. According to this, there are many of the six million German wives who are between 25 and 60 years old and earn less than their husbands. The problem: if you work in a tax-free and duty-free 450-euro job, for example, you have little financial incentive to change anything. If they switch to a better-paying part-time or full-time job, there is often little left of the additional money because a relatively high amount of income tax has to be paid, according to the foundation. The spouse splitting in combination with the mini-job construction is to blame.
At the latest in old age or in the event of a divorce, the low income for the women would then take revenge. In addition, far too many women have been lost to the labor market. “In the course of demographic change and the shortage of skilled workers, Germany can no longer afford this,” says Bertelsmann labor market expert Manuela Barišić. In an as yet unpublished study, the foundation therefore calls for a “combined reform” of spouse splitting and mini-jobs. The double reform could bring “124,000 people into work, 108,000 of them women”, the Munich-based Ifo Institute has calculated on behalf of the foundation.
At this point, the possible traffic light coalitioners in Berlin are likely to listen carefully. Because they have indicated in their election manifestos that they want to turn these adjusting screws. The SPD wants to reform the splitting for new closed marriages and introduce a right to vote for existing marriages. The Greens propose to replace splitting with “individual taxation with a transferable allowance”. The common argument against the status quo: spouse splitting – in which the incomes of women and men are added, divided by two and then taxed at the same rate – prefer the single-earner model. “The splitting of spouses no longer depicts social reality,” says the Social Democrats.
“The current rules are demotivating”
The FDP does not want to affect the splitting of spouses, but proposes changes in mini-jobs and wants to increase the incentives for people who receive social benefits to change something. In practice, in the current tax and transfer system, there can even be extreme cases in which additional euros earned in the job lead to less money in your pocket at the end of the month. “The current rules are demotivating and they hardly reward you step by step to leave the basic security through your own work,” complains the FDP.
In its publication, which should not coincidentally fall into the exploratory phase, the Bertelsmann Stiftung does not advocate a radical abolition of the splitting of spouses. That would hardly be constitutionally possible anyway. Instead, the foundation brings a “real splitting” into play, in which each spouse is assessed individually, but a certain amount can be transferred to the partner. The sum of 13,805 euros, which is based on maintenance law, is proposed. The negative incentive effects of spouse splitting do not disappear in this model, but they become smaller, calculated the Ifo economists Andreas Peichl, Maximilian Blömer and Przemyslaw Brandt, who calculated for the foundation. In a simulation, they come to the conclusion that real splitting alone would bring 44,000 women into work.
Reward for more work
The second part of the proposed reform concerns mini-jobs. Since 2013, they have ensured that earned income up to a limit of 450 euros does not count towards taxable income and that the employee does not have to pay any social security contributions. He or she is therefore not employed subject to social security contributions and does not acquire any entitlement to social security. Above the mini job limit, income is taxable; a sliding zone begins in which social security contributions increase steadily. An example from the study shows what effects this, in combination with spouse splitting, can have in practice for married couples: if the man earns 48,000 euros gross per year, the wife would earn 5400 euros with an hourly wage of 10 euros and a mini-job with around ten hours a week earn extra in the year. “If she chooses a part-time job with 20 hours a week instead, with the same gross hourly wage, the family will not even have an extra 1000 euros.”
In order to make overtime more lucrative, the foundation proposes abolishing the minijob limit of 450 euros and raising social security contributions from the first euro. They should start with mini contribution rates and take full effect with a monthly income of 1,800 euros. According to the study, this would bring 62,000 more women into work. However, since not all would work full-time and in some cases there may be incentives to reduce working hours, the total effect of the combined reform would correspond to 41,000 full-time positions, according to the authors. According to the calculations, the state budget – and that should also interest the traffic light coalitionists – would not be burdened by the reforms. Inequality would decrease somewhat because high earners would be burdened a little more and low earners would be relieved.