With the Hartz IV Law, which took effect on January 1, 2005, social welfare for those capable of work and unemployment assistance were consolidated in Arbeitslosengeld II (ALG II, or Unemployment Benefits II). Prior to this reform, social welfare and unemployment assistance were paid out separately by municipalities and the Federal Labor Office (today: Federal Employment Agency). Unemployment Benefits II) – informally known as Hartz IV – is given to needy individuals and/or households when unemployment benefits run out (usually after twelve months of unemployment) and to former recipients of social welfare who are capable of work. In May 2006, about 5.25 million individuals were registered as receiving Unemployment Benefits II and about 1.88 million people were registered as receiving social welfare (for those not capable of work). This diagram shows the uneven distribution of Hartz IV recipients – the East German federal states have been most affected by the reform.

Title of the diagram:
Hartz IV in the federal states
Number of Hartz Recipient per 1,000 residents

(Six categories from light pink to red)
0 to 49
50 to 74
75 to 99
100 to 124
125 to 149
150 and more

Number of people receiving aid in total: 7.12 million
Percentage of people receiving Unemployment Benefits II: 74%
Percentage of people receiving social welfare: 26%