It is also possible to have debts with providers of social benefits such as the Social Welfare Office or Jobcentre. These arise primarily if you receive a demand for the repayment of a loan or benefits that have been paid out unjustly without authorisation.
If this happens to you, it is important to know which office the claim comes from. The regulations differ depending on whether someone receives benefits pursuant to Book II of the German Social Code (SGB II) („citizen‘s allowance“/„Bürgergeld”) or social assistance under Book XII of the German Social Code (SGB XII) (social assistance benefits, basic income support in old age or in the event of reduced earning capacity).
Debts arising from loans
Anyone who needs more money at short notice as they cannot meet their everyday expenses from the monthly payments from the agency or from their assets, either due to special circumstances or an emergency, can apply for a loan for a so-called „unavoidable need“.
Examples of an unavoidable need:
- Money to secure accommodation in the event of rent arrears or unpaid electricity or water bills
- Deposit when renting a new flat
- Necessary repairs to a cooker or washing machine
- Necessary purchase of new winter clothes for growing children
- Replacement in the event of theft or other loss
The prerequisites for getting a loan and, above all, for repaying it, depend largely on whether you receive benefits according to Book II of the German Social Code (Jobcentre/Employment Agency) or Book XII of the German Social Code (Social Welfare Office).
In the case of Citizen‘s Allowance (Book II of the German Social Code) the repayment of the loan is regulated by law. As long as you receive citizen‘s allowance, your standard payment will be reduced by 5 % per month in order to repay your debt to the Jobcentre, starting in the month in which you received the loan. If you no longer receive citizen‘s allowance, e. g. because you have started a new job, and the loan has not yet been repaid at this point, the remaining amount owed is due in full immediately.
In the case of social assistance, repayment is not regulated by law, but is determined individually in an assessment notice or is based on the provisions agreed in advance in the loan agreement. You are only required to repay the loan if the emergency situation for which the loan was taken out no longer exists and repayment does not put you in a situation where you would need assistance again. The financial circumstances of the borrower must always be taken into account.
Debts due to claims for the repayment of benefits
The Jobcentre or Social Welfare Office can reclaim benefits in the following cases:
- If the need for assistance is caused by socially unacceptable behaviour
- You received benefits unjustly on the basis of incorrect information provided by the person concerned, incorrect assessment of the facts or errors in the administrative procedure that lead to an incorrect benefit decision.
1. Socially unacceptable behaviour
Socially unacceptable behaviour in the context of citizen‘s allowance or social assistance is when someone has deliberately or negligently caused their own hardship or need for assistance. For example, if you give up your job or apprenticeship without good reason and lose your regular income as a result. Or if someone squanders a large amount of money in a short period of time, even though they could have used it to meet their living expenses.
In the case of both citizen‘s allowance and social assistance, you are obliged to repay the benefit in full if your behaviour is socially unacceptable (Sect. 34 SGB II, Sect. 103 SGB XII). The office will issue a notice to this effect. If you are still receiving benefits at this time, your debt may be offset against your current benefit entitlement. This means that the next monthly payment will be lower because the agency withholds part of the amount owed. In the case of socially unacceptable behaviour, this is 30 % of the standard rate (Sects 34, 43 (2) SGB II; Sect. 26(2), Sect. 104 SGB XII).
Repayment can only be waived if this would represent a hardship for the person concerned. This must be examined on a case-by-case basis. However, the recognition of a case of hardship is subject to strict conditions and almost always has to be fought for in court.
NB: This type of debt can be inherited! This type of debt only has to be repaid by the person who is guilty of socially unacceptable behaviour. Uninvolved parties such as other family members – even if they belong to the community of need – are not debtors.
2. Unjustly received benefits
If benefit notices are changed or cancelled because they are incorrect and this has resulted in an overpayment, the Jobcentre or Social Welfare Office may demand repayment of the amount concerned.
In the case of the citizen‘s allowance, the amount offset may not exceed a maximum of 10 % of the relevant standard requirement (Sects 41, 43 (2) SGB II). Under social welfare law, a ceiling of 30 per cent of standard needs level 1 exists – the Social Welfare Office has a wide margin of discretion regarding the amount to be offset.
Both in the case of social assistance and citizens‘ allowance (albeit in the latter case to a more limited extent), the agencies may set the amount to be offset at their own discretion. They must decide on a case-by-case basis whether and to what extent amounts are to be offset and also justify this decision.
NB: If the demand for repayment does not contain any information about how discretion was exercised the notice is unlawful! You should lodge an objection against the decision.
If you have received a benefit unjustly, but this is solely due to an incorrect calculation by the agency, you only have to pay it back if you could see the error. If, on the other hand, you assumed the decision was correct and used the benefit in this belief, you do not have to pay back the benefit even though it was unjustly paid.
If someone acted in good faith and understandably trusted in the legality of administrative action, although they could have recognised the error themselves if they had looked carefully, the individual case must be investigated. Distrust is appropriate, for example, if a regularly recurring benefit is suddenly higher for no recognisable reason, without this being justified in the decision.
