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930,000 new mini-jobs in one hundred days

930,000 new mini-jobs in one hundred days

Around 930,000 additional jobs have been created in just the first 100 days since the introduction of the new regulation on mini-jobs. The Bundesknappschaft (Federal Miners' Insurance Institution) estimates that the one million mark will be reached by the end of the year. The dismantling of bureaucracy and greater attractiveness of jobs have had a positive effect on the labour market.

"The Federal Government has set the right course with its new regulation on mini-jobs as part of the Hartz laws, which came into force on 1 April 2003", stressed Minister for Social Affairs Ulla Schmidt on 18 July 2003 during the presentation of figures on the development of mini-jobs. "This is the start of a success story." The new regulation has cut back bureaucracy and made low-paid jobs more attractive.

According to the Bundesknappschaft, the central administrative office for mini-jobs, there were 5.8 million low-paid jobs in Germany at the end of June 2003. This is approximately 1.7 million more than at the last count in September 2002. A total of around 930,000 additional jobs have been created since the introduction of the new regulation on mini-jobs. The one million mark could be reached by the end of the year. "The results far exceed the original expectations. The new regulation has made an important contribution to job creation, flexibility and security," said Ulla Schmidt. Trade and industry, employees and, above all, the unemployed have been active in seizing and using the opportunities offered by this new regulation, said the minister.

Majority of mini-jobs in the service sector

Many of the mini-jobs are found in the service sector, from cleaning, through the health system, trade, consultancy services to postal/courier services. Up to 67 per cent of these jobs are performed by women. For the first time, there has also been a rise in number of registered jobs in private households. Registrations via the new, simplified so-called household cheque process (Haushaltsscheckverfahren) increased fivefold to around 28,000 by the end of June. In total, there were just under 34,000 low-paid employees working in private households. The Bundesknappschaft estimates that this number will rise to 50,000 by the end of this year.

Increased contribution revenue as a result of mini-jobs

Initial calculations on the financial effects of mini-jobs show that growth in mini-jobs will lead to additional contribution revenue of around EUR 150 million for health insurance and pension insurance companies. This result makes it clear that the new mini-job regulation has succeeded in

making this form of employment attractive to employees and employers,

bringing more people with few qualifications into employment,

maintaining social security for employees,

converting moonlighting into regular employment,

creating acceptance of this form of employment among employers by cutting back bureaucracy, and

at the same time, generating additional revenue for social insurance companies and tax revenue.

This proves the success of the Federal Government's plan to improve basic conditions in order to combat unemployment, as set out in Agenda 2010.

New regulation on mini-jobs since 1 April 2003

Since 1 April 2003, the maximum monthly earnings of low-paid jobs have been EUR 400 instead of EUR 325. At the same time, working hours are no longer limited to 15 hours per week. The employer pays a lump-sum contribution of 25 per cent, of which 12 per cent is for pensions insurance and 11 per cent for health insurance, as well as a standard lump-sum tax of 2 per cent.

Special support applies to insurance-exempt mini-jobs in private households. The lump-sum contributions here are just 12 per cent. In addition, the employer can deduct 10 per cent of his/her expenses (max. EUR 510) for tax purposes each year. Registration via the household cheque process is very simple. The establishment of the central office for mini-jobs at the Bundesknappschaft benefits employers: the central office accepts mini-jobbers' applications, passes on lump-sum contributions and handles the household cheque process.

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