In this policy brief we investigate the (hypothetical) implementation of the Hartz IV reform in Austria: unemployment benefit (Arbeitslosengeld) recipients would receive the social assistance-type minimum income benefit (Bedarfsorientierte Mindestsicherung) instead of the needs-oriented insurance benefit unemployment assistance (Notstandshilfe) after termination of entitlement. We argue that replacement of unemployment assistance by minimum income benefit would lead to considerably reduced public expenditure per year but it would also entail a considerable increase in the at-risk-of-poverty rate (by around two percentage points) and in income inequality. In the Brief we present two scenarios and their impact on expenditure and poverty, and we also look into other individual and societal consequences as well as the advantages and disadvantages of the reform from the German experience where the model has already been applied.
