A German town with massive unemployment has cut jobless numbers from 17 percent to just 6 percent over the last year by encouraging people to carry out community service.

The small town of Bad Schmiedeberg in the eastern state of Saxony-Anhalt is now paying the town's long-term jobless to do tasks for which there is no money in the local authority's coffers.

Jobless residents of the town who turn down offers of employment made under the scheme get their unemployment benefit cut: those who accept are given extra cash.

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Although the scheme is no substitute for a thriving local economy with an ample supply of highly-paid jobs, most local people seem happy with the scheme.

Psychological boost

According to the town's mayor, Stefan Dammhayn, the scheme has given unemployed people a psychological boost by forcing them out of isolation and back into the community as well as getting them into the routing of going to work regularly.

"They will be fit for work when they have the chance to get a regular job," he said. "We needed to try out a new idea and that had to be better than doing nothing."

In setting the scheme up, care had to be taken not to put existing jobs at risk, particularly in small and medium-sized businesses.

As a result of the scheme the town's old people's home now has 13 extra staff to help out with the daily chores. The home's boss, Lothar Neumann, claims the scheme has been a great success.

"Our community service workers are here to help our clients pass the day more pleasantly," he said.

"They accompany them throughout the day and listen to their individual wishes. For example, they take them for walks, talk to them and look after their pets.

"They also assist with therapy and help prepare old people’s birthday parties or they just read out loud for them from newspaper articles."

Everyone appears to benefit

Forty-one-year-old Antje Litschewski, who works as a community service worker at the old people's home, claims the scheme has been good for the jobless as well as residents of the home.

"I’d been unemployed for the last four years with no chance at all of getting a job on the regular labor market," she said. "Now the situation is a lot better, financially as well. I get some 300 euros ($400) more than I used to.”

“I really feel needed here. I just can’t imagine what it was like for the regular staff without us. They always seem to be under extreme stress. I think that our work is really appreciated.”

The scheme has also been welcomed by many of the town's residents as the extra wages have boosted the local economy.