The old system of unemployment benefits

Prior to the Hartz reforms that came into force between 2002 and 2005, Germany had a three-tier system of income protection in case of unemployment  

Unemployment insurance benefit (UB, Arbeitslosengeld) provided earnings-related income replacement for a limited duration of up to 32 months if unemployed had been in employment covered by social insurance for at least 12 months. Unemployment insurance benefits were funded through employer and employee contributions and administered by the Federal Employment Agency, which was also in charge of implementing active labour market policies. 

Social assistance (SA, Sozialhilfe), finally, provided basic income protection on a means-tested and flat-rate basis for all German inhabitants - with or without employment experience - who could not rely on sufficient resources from earned income, other social benefits or family transfers. Thus, social assistance was the major protection system for unemployed with either no employment experience or unemployment insurance/unemployment assistance claims that did not match the guaranteed minimum income. Social 

In comparison to the unemployment assistance scheme, means-testing was harsher in the social assistance scheme moreover, any job was considered acceptable. For the labour market integration of employable social assistance recipients, a fairly rudimentary labour market policy, the Help to Work scheme, was available. It was operated by the municipalities with a considerable scope of discretion. There was no entitlement to integration measures by the PES. 

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