How much wealth are Hartz 4 recipients really allowed to have?
Those in financial need are entitled to Hartz IV or unemployment benefit II (ALG II). Hartz IV recipients are nevertheless allowed to own assets – within certain limits. Hartz IV recipients may only have limited personal financial resources, i.e. only own a certain amount of assets or earn a limited amount of income. For this reason, someone who has sufficient financial resources of their own is not allowed to claim social benefits such as Hartz IV. In this context, the question arises as to which assets can be counted at all or which assets can be used according to Hartz IV.
Valuable Asset
Assets are deemed to be usable if they can be used directly for subsistence or if their monetary value can be used for subsistence via consumption, sale, lending, renting or leasing. It is irrelevant whether the assets are deposited in Germany or abroad. These include, for example: Cash, balances on the current account as well as balances on investment accounts (fixed-term deposits, overnight money, securities accounts, etc.) or savings balances, home savings accounts, savings certificates, but also securities (shares and fund shares) and capital life insurance policies and, last but not least, home and real estate, plus condominiums. For example, the job center could require a (potential) Hartz IV recipient to use their savings first, owner-occupied residential property is rented out and the rental income achieved in this way is offset against his needs. Another option would be to give up life insurance. The resulting amount would then be used to cover the needs of the Hartz IV recipient. On the other hand, assets that the owner cannot freely dispose of – for example, in the case of a pledge – are considered non-recoverable.
Savings assets – allowances
The legislature grants numerous exemptions. The latter protect the assets before they are offset against Hartz IV benefits (so-called protective assets). The protective assets are defined in Social Security Code II (SGB II). According to this, Hartz IV recipients are granted 150 euros per year of life – they may not be touched. A minimum of 3,100 euros and a maximum of 9,750 euros per person as well as 750 euros in reserves for essential purchases count as non-deductible assets.
Hartz IV recipients with a date of birth before January 1, 1948 are granted an increased allowance for each completed year of life – this amounts to 520 euros, but may not exceed 33,800 euros. This is a general rule. This means that it is irrelevant whether the person in need received unemployment benefits before Hartz IV or not. Persons born between December 31, 1957 and January 1 , 1964 receive a basic allowance of a maximum of 9,900 euros. Those born on or after January 1, 1964 are entitled to a basic wealth allowance of a maximum of EUR 10,050. With regard to the calculation of the asset allowance, the sum of the completed years of life on the first day of the relevant permit section is decisive.
It is also possible to combine the basic allowances of the applicant and the (marriage) partner. However, this addition of the allowances is not possible for underage children. Minors have no allowance, which can be claimed depending on age and monthly lump sum. Minors are to be granted a fixed basic allowance of 3,100 euros on their assets. The latter applies to Hartz IV receipts as well as to receipts of social benefits. With one exception, the basic tax-free allowance is transferrable: If the basic tax-free allowance is not fully exhausted by a member of the benefit community, it can be added to these other members, since it is in principle added to the tax-free allowance of the other members in the benefit community. However, it is not possible to transfer the allowance for a minor child. This basic allowance from assets should only benefit the assets of the child.
A sample calculation shows: For a 50-year-old recipient, this would be 7,500 euros . In addition, there would be 3,100 euros per dependent child with a maximum exemption limit of 10,050 euros. In addition, those affected are allowed to keep their retirement assets such as saved Riester or Rürup pensions with a total value of 50,000 euros. This applies to all pension contracts that are only paid out after retirement age. In addition, the 750 euros mentioned are added – they represent a so-called financial leeway, for example for the necessary purchase of a washing machine.
Appropriate household goods and appropriate car
What specifically counts as assets that are not countable or assets that are protected? First of all, this includes appropriate household effects. This means all objects that are indispensable or at least usual in household management as well as in living. However, they must meet the normal average standard in terms of number and quality. However, the so-called “appropriateness” refers to the lifestyle during the receipt of Hartz IV, not to the one before the benefit was received. It can therefore be assumed that furniture, electrical appliances and the like will not be counted if they are appropriate and within the usual range. However, anyone who owns expensive works of art or relatively high-quality furnishings must be prepared to count them as assets when drawing Hartz IV. Nevertheless, the offsetting of the asset amount includes an amount for reasonable procurement of spare parts.
A suitable car or motorcycle for each person in need of help in the community of needs is not considered as an asset. Normally, an appropriateness check does not appear necessary if the value of the vehicle after deducting any credit or financing costs does not exceed a value of 7,500 euros at the time the application is submitted . If a car with special equipment is required (e.g. in the case of a disability), the service provider may consider a higher amount to be quite appropriate in individual cases and grant it accordingly. If the value of a vehicle is beyond the limit of reasonableness, the amount exceeding the reasonable part will be added to the basic allowance in accordance with Section 12 Paragraph 2 SGB II.
residential property and land
Anyone who has owner-occupied, appropriate residential property (home, condominium) can in principle assume that this is not counted as assets according to Section 13 Paragraph 3 SGB II. In its judgment of November 7th, 2006, the Federal Social Court laid down so-called guideline values for the size of your own home or condominium, for which an examination of the appropriateness is not required. Accordingly, one to two people living in the household are entitled to their own home of 90 square meters or a condominium of 80 square meters, with three people it is 110 or 100 square meters, with four people 130 or 120 square meters, for each additional person 20 square meters are estimated. These are by no means fixed values. When examining the individual case, the service provider is required to examine the entire circumstances of the applicant. This applies, for example, to the family situation, any disability, family planning and the expected period of receipt of Hartz IV benefits.
Plots with a maximum of 800 square meters
In addition, plots of land are not counted as assets if they correspond to certain plot areas – 500 square meters in urban areas and 800 square meters in rural areas. However, larger plot areas can be appropriate if they are fixed in development plans. However, if the service provider comes to the conclusion that the living/property area is inappropriate, he can demand partial utilization. This is a division of the property – it is nevertheless only reasonable if the division creates an appropriate area. If the possibility of partially utilizing a property is ruled out, for example because the area cannot be divided in principle, then it is generally considered appropriate. If it is possible to separate parts of the building as part of the recycling, these are to be sold or mortgaged. However, if it is not possible to form separate apartments, then utilization is to be ruled out. In such a case, it is
As a rule, the owner-occupied home is not touched. However, the job center is authorized to decide on appropriateness. The job center is required to take the judgment of the Federal Social Court as a basis, according to which – as already mentioned – a house or an apartment of 80 to 90 square meters is considered appropriate for a household with one or two people. Ultimately, however, the sole discretion of the caseworker concerned will determine whether a family may continue to keep their home or apartment. What is considered appropriate in detail is also often determined by the region and the rental or purchase prices there. Accordingly, one could not touch a detached house in the country, while a house of the same size – but located in the city – could already be too valuable, which would result in a sale.
retirement savings assets
An important point is the pension assets. In the case of an applicant or a partner living with him or her in a community of needs who are not subject to statutory pension insurance, the assets set aside (property or rights) are not eligible in an appropriate amount. This affects a group of people who would in principle be subject to pension insurance but who are not subject to the obligation as a result of the decision of the pension insurance institution. The assets must be unmistakably identifiable as old-age provision, for example by presenting an insurance policy. In addition to the basic allowance already discussed, the applicant and all persons living with him or her in a community of need receive other allowances for the assets of the old-age provision. This type of capital accumulation for old-age provision includes, for example, the Riester pension, but also the Rürup pension. This is a state-subsidized asset under the Retirement Assets Act.
Riester pension and Rürup pension
This is also the reason why this form of old-age provision is not subject to crediting as assets under Hartz IV. In addition to personal contributions, government allowances and income from the Riester pension are also exempt. The maximum amounts of state support and thus also the asset allowance or its limit are based on Section 10a of the Income Tax Act (EStG). In order to guarantee the privilege, annual proof must be provided. This is to ensure that the contract meets the requirements of Section 5 of the Old-Age Provision Contracts Certification Act (AltZertG). If the Riester contract is terminated prematurely, the exemption will no longer apply. After termination of the contract, the amount saved is taken into account in the assessment of benefits under Hartz IV – however, a possibly remaining basic allowance can be offset here. income,
In addition, every Hartz IV beneficiary is entitled to a further “free allowance for other assets of the old-age provision”. This allowance is earmarked – if it falls below it, it cannot be transferred to other assets. Anyone who uses the so-called “ free allowances for other assets of the old-age provision’, must
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Anyone who uses the so-called “ free allowances for other assets of the old-age provision’, must know that it is not possible to utilize the old-age provision before entering retirement
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know that it is not possible to utilize the old-age provision before entering retirement. In principle, the contractual obligation is sufficient, according to which exploitation “before the age of 60” is excluded. When you reach the age limit or when you retire, there is a monthly reduction in the protected amount of assets by 1/180 for Hartz IV recipients. The “180” corresponds to 180 months, the equivalent of 15 years, and is the result of the average life expectancy. If the assets of the old-age provision are higher than the applicable exemption amount, the excess amount must be offset against the assets. In exceptional cases or in the event of unreasonable hardship, use in the context of the unemployment benefit II application can be waived in individual cases.
Honesty in order not to have to pay back Hartz IV
And one last thing: Anyone who now thinks it is better to keep quiet about their “true” assets can have big problems and have to pay back Hartz IV. The Federal Social Court only confirmed this assessment in 2018: two former Hartz IV recipients had complained. One had stated various savings in his application in 2006, but concealed a savings account with a credit balance of 10,000 euros. He received Hartz IV for more than seven years. The scam was exposed and the job center demanded 31,000 euros back. The other former Hartz IV recipient had not given life insurance of 5,300 euros. For two years he received Hartz IV. Here the job center demanded 18,000 euros back. The two Hartz IV recipients went to court because they were of the opinion that the repayment should not be higher than the hidden assets. They found the amount of the repayments “simply unfair”.
The job centers objected and argued that unemployed people who did not receive Hartz IV due to their assets would also refrain from applying later. Apparently they would then try to get a job with more intensity in order to save their fortune. The job centers were right before the Federal Social Court. Nevertheless, the Kassel judges pointed out that the plaintiffs could claim at least a partial waiver of the recovery. The regulation applies if there is a risk of lifelong over-indebtedness. Another important point: Items that are necessary to continue vocational training or to take up employment do not count as assets. There is a crucial reason for this: In a later integration measure by the service provider, they would otherwise have to be procured again. Without question: A Hartz 4 recipient does not have the financial possibilities of an employee who receives a good salary. But be careful:Honesty is the best policy – even when receiving Hartz IV .