German Labor Minister Ursula von der Leyen told reporters Sunday that members of the center-right coalition approved raising the benefits for long-term unemployed to 364 Euros a month starting January 2011.

Currently, Germany's 6.5 million Hartz IV recipients receive up to 359 euros per month.

Monthly benefits for children will remain the same at 215 euros, 251 euros and 287 euros for children under age six, aged six to 14 and 14-18, respectively.

The German public was not in favor of increases. Fifty-six percent of those questioned in a survey by the Emnid polling institute for the German newspaper Bild am Sonntag, said they opposed any increase in welfare payments, no matter how small.

The move comes after Germany's highest court in February ordered the government to adjust its formula for the jobless benefit known as Hartz IV. Previously, adjustments were based on changes in pension payments.

Merkel "satisfied"

Party leaders from Merkel's Christian Democrats (CDU) and her Free Democrat (FDP) and Christian Social Union (CSU) coalition partners met Sunday with the chancellor to discuss the Hartz IV payouts.

After infighting over tax breaks, healthcare reform, immigration, conscription and the use of nuclear power, changes to the payments made to long-time unemployed were the latest in the series of disagreements that have divided Merkel's coalition and weakened public support for the government.

Yet the coalition party leaders overcame their differences and appeared pleased with their decision. Both Merkel and FDP chief Guido Westerwelle said they were "very satisfied" with the agreement.

CSU party leader Horst Seehofer had earlier vowed to oppose any increase, saying, "The social welfare state must not lose control; it has to remain affordable."

The FDP's parliamentary leader, Birgit Homburger, meanwhile defended cuts for tobacco and alcohol and instead proposed access to modern communications. "There are good arguments that nowadays Internet access is a basic right," she said.

Unions warn of poverty

Meanwhile, Germany's labor unions were quick to warn that any cuts in unemployment benefits would produce more poverty.

Annelie Buntenbach, from the German Federation of Trade Unions, accused the government of not protecting Hartz IV recipients from drifting deeper into an economic hole.

"The planned increase of 10 euros for the long-term unemployed is just not enough," she said, before the cabinet approved the 5 euro hike. "The increase is so low that a family couldn't even afford to go to a public pool."

The Bild am Sonntag newspaper in an editorial pointed out that an increase of 11 euros would have amounted to a 3 percent increase. Instead the increase will be less than half that figure.

The weekly paper called demands some members of the opposition had made for a 30-euro or 40-euro increase "exorbitant."

"The idea that anybody who works should have more than those who don't would turn into a joke," the paper commented.

Author: Gregg Benzow, David Levitz (AFP/dpa/epd/Reuters)

Editor: Sean Sinico