In this specific case it worked about a single father of three children whose account was already in the red. He received one from the tax office Tax refund of 2382.92 euros. The man had previously had a normal job – the repayment was from that time.

The responsible job center still assessed the sum as income. The authorities spread the amount over six months and therefore wanted the father around every month Deduct 400 euros from the citizen’s allowance at the time.

The dispute at a glance:

• Tax refund: 2382.92 euros
• Job center distributed amount six months
• monthly reduction: around 400 euros citizen’s money
• The father’s account remained despite payment further in the red

The account remained in the red despite payment

In reality, the man hardly had any of the money. The tax refund ended up in an account that was already overdrawn – and initially only reduced the deficit there. No real credit was created. After the credit, there was even a negative account balance of around 356 euros stand.

In the following months the account continued to be significantly in the red. At the same time, high interest accrued on the overdraft facility – according to the ruling, for example 12.55 percent at a bank and 10.55 percent at another. This meant an additional financial burden for the father.

Job center refers to overdraft facility

The job center nevertheless argued that the man still had access to money. Finally he did an overdraft facility with a credit line of several thousand euros.

It was precisely at this point that the courts set a limit. The decisive factor is not whether there is still a theoretical credit limit, but whether someone actually has money at their disposal. According to the judges, anyone who could only have resources because they took on new debts has no disposable income.

The Federal Social Court therefore made it clear: A one-off payment such as a tax refund may not be taken into account if it only reduces old debts and does not create freely available credit.

Subsistence levels must not be secured through debt

The planned reduction would have had serious consequences for the plaintiff. With today’s rule set of 563 euros for single people would be a deduction of around 400 euros mean that only about 160 euros per month to stay alive.

It was precisely this situation that the judges wanted to prevent: the subsistence minimum must not be financed through debt. If a payment simply reduces an existing deficit on the account, there will be no freely available credit. In such cases, the job center is not allowed to simply count the sum as income.

Judgment sets limits for job centers

The case also shows that courts… Check the practice of the job centers again and again. While the Gelsenkirchen social court initially dismissed the lawsuit, the North Rhine-Westphalia state social court agreed with the father. The Federal Social Court ultimately confirmed this decision and rejected the job center’s appeal.

The judgment is therefore considered an important clarification: What matters is whether those affected can actually use the money they have received – without incurring new debts.