The German government plans to raise minimum jobless benefits by 5 euros per month from the current level of 359 euros, coalition sources told Reuters on Sunday.
Chancellor Angela Merkel met with leaders of the coalition partners, the Christian Social Union and Free Democrats, in her offices on Sunday to hammer out a reform of the minimum jobless benefits to meet a constitutional court requirement.
The reform in benefits known as Hartz IV could weigh on state coffers. There are 4.7 million people who receive the benefits. The finance ministry has made provision for outlays of an extra 480 million euros per year to cover the cost of extra spending on education that the high court demanded.
Germany's highest court in February ordered the government to adjust its formula for the Hartz IV jobless benefit. Before that adjustments were based on changes in pension payments.
The opposition Social Democrats said the reform was insufficient. They said they would block the reforms in the upper house of parliament, where Merkel's centre-right government lost its majority in July. Merkel's government would need SPD backing in the upper house to pass the reform. Labour Minister Ursula von der Leyen presented the proposal and the cabinet is expected to endorse the measure on October 20.