What encompasses and excludes the entitlements of a citizen's allowance?
Social Assistance as a Safety Net: This type of financial aid is designed to ensure people's basic needs are met. Additional income can be earned, but there are restrictions. What can be retained, what gets calculated?
Over five million individuals in Germany receive this form of assistance from job centers. It provides a living allowance for job seekers and their families when they either stop receiving unemployment benefits or receive an insufficient amount for living costs.
Recipients of this aid may also have other sources of income or earn additional money. However, these are calculated with the basic allowance. Here are some facts and figures about additional income, supplementary income, and deductions that people receiving this assistance should be aware of.
How much extra income can I earn?
There's no limit to the amount you can earn. It might even be enough to cover your expenses again.
"Luckier individuals can move away from this assistance," says Frank Lackmann, an advisor at Caritas in Aachen. While this may not always be possible, those who work while receiving this assistance will have more money in their pockets, according to Lackmann, depending on what they can keep from their earnings.
What portion of my earnings will be considered?
According to the Social Security Code (SGB II), income from employment must be offset against this financial aid. So-called offset and exemption allowances ensure that a significant portion of the additional income remains. A fixed 100 euros is always exempt. "Regardless of the salary level," says Frank Lackmann.
Additional percentage-based amounts are added to this fixed sum. They are based on the income level. For example, mini-jobbers can additionally deduct 20 percent of the 100 euros. The calculation would be: 520 euros minus the fixed amount equals 420 euros, of which 20 percent is 84 euros, resulting in a total exemption amount of 184 euros. Mini-jobbers can add this amount to their financial aid.
Single adults without children with a gross income of up to 1,200 euros can reach a maximum exemption amount of 348 euros. These amounts are based on the gross salary. However, since they are subtracted from the net, the calculation becomes more complex.
The amount reduced and what remains depends on factors like marital status, children, their age, travel costs, insurance, and taxes. Since this is different for everyone, "the offset allowances are always determined individually for each case," explains Irmgard Pirkl from the Federal Employment Agency (BA). The Federal Ministry of Labour has an exemption calculator online for initial reference.
Which incomes are also subtracted from this aid?
According to SGB II, all incomes must be considered. This means the support is not only reduced by additional income but also by monetary benefits from other sources. These include child and parental benefits, maintenance, sickness and unemployment benefits, pensions, rental income, interest, dividends, and severance payments.
The job center calculates these incomes along with the corresponding need it has determined - in full. There are no exemptions like with wages. If additional incomes exceed the need, this aid is usually not granted.
What about child benefit and rent?
This aid includes rent costs. As a result, its recipients typically do not receive additional Housing Allowance. Job centers, according to Frank Lackmann, compare whether this aid or Housing Allowance would be more beneficial. If someone is financially better off with Housing Allowance, they must primarily apply for it.
Child Allowance is fully deducted. However, the standard rate for children in this aid is higher than the Child Allowance amount. Consequently, there is a little more money available for the next generation.
Parents also have the option of applying for the so-called Child Supplement instead of this aid. According to Caritas advisor Lackmann, this social benefit is available if the income is sufficient for the parents but not for the children. The family then still receives Child Allowance in addition. Note: "The receipt of Child Supplement and Housing Allowance simultaneously with this aid is mutually exclusive."
Which incomes remain untouched?
Certain incomes remain unaffected. For example, pensions, blind person's allowance, maternity pay, and benefits for war victims or crime victims. Students can keep their income from summer jobs untouched. Immediate aid in case of disasters and so-called honorary gifts from the state on the occasion of high wedding anniversaries and birthdays also have no deductions.
What happens to inheritances and real estate?
Self-occupied apartments are typically protected up to a size of 130 square meters, and single-family homes up to 140 square meters. Therefore, this aid recipients can continue to live there - provided the costs and burdens for the accommodation are reasonable.
For rented apartments, the claim for this aid is reduced by the total rental income. In the worst-case scenario, those affected receive nothing. "If you earn 2500 euros in rent, you don't need this aid," says Pirkl. Moreover, rented properties count as assets and are often worth more than the protected assets.
For inheritances and other assets such as stocks, valuable jewelry, and savings, waiting periods apply. "In the first year of this aid receipt, only significant amounts are accessed," says the BA spokesperson. Afterwards, the state expects this aid recipients to cover their living expenses from their assets before applying for support.
In the first year, high allowances apply: around 40,000 euros for the applicant, plus 15,000 euros for each additional member of the needy community. After the waiting period, the protected assets amount to 15,000 euros for each person living in the needy community. Any assets above this are taken into account.
Despite the fact that recipients of social assistance in Germany can earn additional income, this income is subject to calculations and deductions. According to the Social Security Code (SGB II), a significant portion of the additional income remains exempt, with a fixed 100 euros always being exempt and additional percentage-based amounts added based on the income level.
When considering the impact of child benefit on this aid, it's important to note that it's fully deducted, but the standard rate for children in this aid is higher than the Child Allowance amount, providing a little more money for the next generation.
