A citizen’s benefit recipient had 3,000 euros credited to her account after a previous court case took far too long. The job center assessed the money as income, revoked the citizen’s allowance for several months and demanded money back.

But the Federal Social Court overturned this decision: the compensation cannot be based on that Citizen’s money (today basic security) are taken into account (File number B 14 AS 15/20 R). From the perspective of the Kassel judges, the payment was not intended to support living expenses, but rather to compensate for an immaterial disadvantage. That’s exactly why it remained free of charge.

What the case was about

The plaintiff lived with her husband, who received benefits under the Social Security Code. There had previously been a dispute between the couple and the job center over the costs of accommodation and heating. Because they believed the proceedings at the time were taking an unreasonably long time, both of them subsequently sued for compensation.

The new legal dispute ended with a settlement. A total of 4,200 euros was agreed for both spouses. According to the judgment, the plaintiff was credited with 3,000 euros.

For the job center The matter was clear: it evaluated the credit as income, completely canceled the already approved unemployment benefit II for June to September 2017 and demanded the benefits back.

Why the Federal Social Court contradicted the job center

The Federal Social Court made it clear: The payment may not be taken into account as income for citizens’ benefit. The compensation is paid because of an intangible disadvantage – namely the fact that legal proceedings took an unreasonably long time.

According to the court, the compensation is not intended to pay for food, rent or electricity due to the length of the proceedings, but rather to compensate for the consequences of a delay in the proceedings that violates the rule of law.

3000 euros remain free of charge

The 3,000 euros credited in May 2017 were not allowed to lead to a reduction in citizens’ benefits. The job center was neither allowed to revoke the approval nor demand reimbursement.

The Federal Social Court thus overturned the ruling of the Lower Saxony-Bremen State Social Court. The earlier ruling of the Hildesheim Social Court, which had ruled in favor of the plaintiff, remained in effect.

What this means for citizen benefit recipients

The decision is important for those affected because it lays down a clear principle: not every monetary payment is automatically counted as income in the citizen’s allowance.

What matters is why the money is paid. If a service serves a special, legally defined purpose, it can be protected. In the case decided, this was compensation for intangible disadvantages caused by an excessively long legal process.

The judgment also shows that job centers cannot simply equate compensation with normal income such as wages, pensions or maintenance.

Those affected should pay attention to this

Anyone who receives compensation, compensation or other special payment should disclose the process to the job center. At the same time, however, it is worth checking carefully whether the service even counts as income.

Three questions are particularly important:

• What was the money paid for?
• Is the purpose expressly stated in the law or decision?
• Is the payment intended to compensate for a particular disadvantage and not to secure a living?

Especially when it comes to compensation, the answer can be in favor of those affected.