But first, a note on usage, and a little history.

In casual speech, the term "Hartz IV" is used to refer to both the restructuring of public support programs that took effect in 2005 and the benefit paid to persons out of work for longer than one year (the latter is properly called "unemployment benefit II", or referred to by its initials "ALG II". In speaking of the support, I use the two terms interchangeably.

The history:

"Hartz IV" was the brainchild of Peter Hartz, the former HR director of VW who advised Gerhard Schröder on the reform of the German labor market (and was subsequently pleaded guilty of taking kickbacks while working for VW).

Briefly:

Hartz concept - Wikipedia, the free encyclopedia

The Hartz IV reform was voted in by the Bundestag on December 16, 2003 and by the Bundesrat on July 9, 2004; taking effect by January 1, 2005. This part of the reform brought together the former unemployment benefits for long term unemployed ('Arbeitslosenhilfe') and the welfare benefits ('Sozialhilfe'), leaving them both at approximately the lower level of the former 'Sozialhilfe'.

Regardless of whether that last bit is true (yesterday's ruling of the Constitutional Court would make that seem doubtful), one of the significant consequences of the restructuring is that it suddenly reclassified masses of able-bodied people who had previously received "Sozialhilfe" ("social aid", i.e. for persons deemed non-employable) as unemployed:

Hartz concept - Wikipedia, the free encyclopedia

By January 2005, the number of people who count as unemployed had risen by about 222,000 due to new statistics introduced with Hartz IV, and by about 300,000 because of seasonal factors (unemployment is much higher in the winter). This brought the total official figure to 5,037,000.

By itself of course this was no bad thing - fewer people were now swept under the rug in the official statistic. Also, the municipalities are responsible for Sozialhilfe, while the state unemployment fund administers unemployment. So this reclassification was welcome relief for the perennial losers in German public finance.

So it probably would not have been bad policy, except that the Social Democrats and Greens felt that they had to set the ALG II benefit at a level that is frankly punitive: adults receive just € 359, children an arbitrary fraction of the same. Also, the labor authorities reserve the right to arbitrarily call ALG II recipients into the office at any time  - supposedly to ensure that they can't do any off-the-books work.

Also, there have been reports of hunger among children in Hartz IV families.

Now if Hartz IV was perceived as just problem for just a few unfortunates, I doubt if this matter would receive quite so much public attention. However, unemployed persons fall into Hartz IV after just 12 months. Also, after 12 months individuals are required to consume any savings, life insurance or other cash-equivalent assets (except for a small exemption) before being eligible for support. So Hartz IV became a focus for the anxieties of those in precarious circumstances - a large group in the current climate.

So what exactly did the justices say?

First off, they explicitly declined to comment on the appropriateness of the current level, or any specific amount (which seems to have prompted some idiots to suggest cutting the support level.) Rather, they said that complained that the way the benefits are set is arbitrary:

Court rules German welfare law unconstitutional | Germany | Deutsche Welle | 10.02.2010

The Constitutional Court did not propose a methodology for recalculating the standard rates, but Hans-Juergen Papier, the president of Germany's Constitutional Court, said benefits must be based on "reliable figures" and "comprehensible calculations." Rough estimates are unconstitutional, Papier said.

So transparent calculations are required to ensure that the support recipients receive is adequate.

But not just to keep body and soul together. Recall this sentence in the item I posted at the top:

The court said that the rules were not transparent enough and did not ensure at least a "dignified minimum" income.

This is a direct reference to the Basic Law:

Basic Law for the Federal Republic of Germany (Grundgesetz, GG)

I. Basic Rights Article 1 [Human dignity]

(1) Human dignity shall be inviolable. To respect and protect it shall be the duty of all state authority.

(2) The German people therefore acknowledge inviolable and inalienable human rights as the basis of every community, of peace and of justice in the world.

(3) The following basic rights shall bind the legislature, the executive, and the judiciary as directly applicable law.

And the Court has formulated that requirement in this case as follows:

So making this happen is the task of parliament. And the Court gave them until the end of the year to revise this.

How they propose to do this is anyone's guess. There has been some talk of providing services in kind instead of cash to cover at least part of the difference (in Fail City, where I live, museums are open free one evening a month - that's culture right there). But there are all kinds of things that are considered normal - children's class trips, birthday parties, communions, Internet - that the state is obligated to come up with. Right in the middle of the worst budget squeeze since the introduction of the Deutschmark.

Interesting times.