In Schleswig-Holstein, the appropriate apartment size for someone receiving social assistance is 50 square meters. However, if the apartment exceeds this size, a lower standard can be applied, allowing the rent to still be considered reasonable. To determine this, it is necessary to establish the reference rent or the upper limit for reasonable rents in the relevant area.
According to the case law of the Federal Social Court (BSG), the appropriateness of the actual expenses for an apartment must be examined in several steps (BSG judgment of November 7, 2006 – B 7b AS 10/06 R, BSGE 97, 231 = SozR 4-4200 § 22 No. 2; BSG judgment of November 7, 2006 – B 7b AS 18/06 R, BSGE 97, 254 = SozR 4-4200 § 22 No. 3; established case law): The size of the apartment of the person in need of assistance must be determined and its appropriateness verified. The assessment of the appropriate size is carried out in accordance with the state-level implementing regulations for Section 10 of the Law on Social Housing Promotion of September 13, 2001 (WofG, BGBl I 2376). Furthermore, an apartment is only considered adequate if, in terms of its furnishings, location, and building structure, it meets simple and basic needs and does not offer a high standard of living. According to the case law of the Federal Social Court (BSG), however, it is sufficient that the product of living space and standard, which is reflected in the rent, is reasonable (BSG judgment of November 7, 2006 – B 7b AS 10/06 R, BSGE 97, 231 = SozR 4-4200 § 22 No. 2), meaning that the rent to be covered in the geographical area that serves as the benchmark does not exceed the reasonable upper limit of the rent.
The concept of appropriateness is an indeterminate legal term, meaning it is a standard of evaluation requiring interpretation. It inherently involves the idea of limitation (cf. Voelzke/Knickrehm/Spellbrink, Costs of Accommodation according to § 22 SGB II, DSGT Practitioner's Guide, p. 25), in this case, the determination of a rent ceiling. This rent ceiling must be established taking into account the conditions of a subsistence-level benefit system (S. Knickrehm in Kreikebohm/Spellbrink/Waltermann, Commentary on Social Law, 2009, § 22, marginal note 7). It should reflect reality, i.e., the conditions on the rental housing market in the comparison area, because the benefit recipient under Section 22 Paragraph 1 Sentence 1 of the German Social Code, Book II (SGB II) is intended to enable them to satisfy their basic need for housing under conditions deemed appropriate under social security law (see also Krauß in Hauck/Noftz, SGB II, as of September 2009, Section 22, marginal note 2; Lang/Link in Eicher/Spellbrink, SGB II, 2nd edition 2008, Section 22, marginal note 15c). Their center of life should be protected. The determined appropriate reference rent or the rent ceiling must therefore be chosen so that the person in need can rent an "appropriate" apartment in the specific comparison area. Since the actual expenses are to be covered, the rent ceiling cannot be defined either as a flat rate or across regions. According to the case law of the Federal Social Court (BSG), the rent ceiling must instead be determined on the basis of a coherent concept that takes this into account (see BSG judgment of 18.6.2008 – B 14/7b AS 44/06 R; BSG judgment of 22.9.2009 – B 4 AS 18/09 R).
According to the jurisprudence of the 4th Senate, a concept exists only if the basic income support provider has proceeded systematically, in the sense of systematically determining and evaluating general, albeit location- and time-specific, facts within the relevant comparison area and for all cases of application, and not merely on a case-by-case basis (Federal Social Court judgment of September 22, 2009 – B 4 AS 18/09 R). Such systematic determinations and evaluations of the generalizable basic income support needs are lacking here. Instead, as the defendant herself stated, she resorted to the table value in the second column from the right in rent level III – single-person households. However, according to the established jurisprudence of the Federal Social Court, the table values for Section 8 of the Housing Benefit Act (WoGG) may only be used as a basis if local information is lacking. The 7b and 14th Senates of the Federal Social Court have repeatedly pointed out that the purpose pursued by granting housing benefit is different from that of basic income support benefits under Book II of the German Social Code (SGB II). When granting housing benefit, the basis is the apartment as rented by the person entitled to housing benefit, without any individual assessment of whether the apartment as such is appropriate in terms of meeting a necessary need (see only BSG judgments of 7 November 2006 – B 7b AS 18/06 R, BSGE 97, 254 = SozR 4-4200 § 22 No. 3; of 18 June 2008 – B 14/7b AS 44/06 R).
The Senate does not agree with the defendant's view that the values in the table for Section 8 of the Housing Benefit Act (WoGG) can be applied "analogously" even without the possibility of obtaining local information. Furthermore, the sound concept cannot be replaced by a mere "cross-check" to see if it is possible to rent apartments up to the table values within a comparable area. Rather, a systematic approach by the basic income support provider is fundamentally required, involving the systematic determination and evaluation of the necessary facts for all cases within the relevant comparable area.
The deciding Senate summarized the requirements for plausibility as follows (BSG judgment of 22.9.2009 – B 4 AS 18/09 R):
– Data collection must take place exclusively within the precisely defined area and must cover the entire comparison area (no ghettoization)
– A comprehensible definition of the object of observation is required, e.g., what type of apartments – differentiation according to apartment standard, gross and net rent (comparability), differentiation according to apartment size,
– Information about the observation period,
– Determining the method of data collection (sources of information, e.g. rent index),
– Representativeness of the scope of the data collected,
– Validity of the data collection,
– Compliance with recognized mathematical and statistical principles of data analysis and
– Information about the conclusions drawn (e.g., upper range or capping limit).
A concept is only sound if it has been developed according to the criteria mentioned above. The social courts review whether the basic income support provider has made accurate assessments, i.e., whether the concept it has chosen is sound and thus justifies its assessments. The court's review therefore focuses on the results of the basic income support provider, taking into account the minimum standards outlined above. These standards ensure that, in accordance with the purpose of the benefit, the person in need is provided with affordable housing that meets their specific requirements and standards. If the concept proves to be deficient during this review, it is then the responsibility of the basic income support provider to make improvements.
The comprehensive collection and evaluation of data to develop a coherent concept is the responsibility of the basic income support provider and is already necessary for a sound decision in the administrative proceedings. In legal proceedings, the basic income support provider must submit its coherent concept upon request by the court. If the basic income support provider decides without a coherent concept, it is obligated, within the scope of its procedural duty to cooperate pursuant to Section 103 Sentence 1, second half-sentence of the Social Court Act (SGG), to provide the court with a reliable basis for its decision and, if necessary, to carry out any omitted data collection and processing. The municipal authority responsible for benefits under Section 22 of the German Social Code, Book II (SGB II), must provide the data it holds as well as the personnel and/or material resources necessary for collecting and evaluating the required data (Federal Social Court judgment of July 2, 2009 – B 14 AS 33/08 R).
However, the assumption of actual costs cannot be unlimited. There is an upper limit to what is considered reasonable. This limit is intended to prevent taxpayers from having to finance extremely high rents that are not only deemed unreasonable by the social security provider but are inherently unreasonable. Therefore, using the table values does not replace the reference rent that must be determined for the relevant area and time period. It merely serves to limit the actual expenses to be covered. This limit is found in the table values for Section 8 of the Housing Benefit Act (WoGG) or now Section 12 of the WoGG. Since this is an abstract limit, independent of the individual case and the specific circumstances of the relevant area, the respective maximum amount in the table, i.e., the right-hand column, must be used – unlike what happened in the present case. Furthermore, a "safety margin" is considered necessary in addition to the respective table value to protect the basic need of the person receiving assistance to secure their housing. Because, in the absence of a coherent concept, it cannot be determined with certainty what the appropriate reference rent actually was. In this respect, the deciding Senate concurs with the 7b Senate (BSG Judgment of November 7, 2006 – B 7b AS 18/06 R, BSGE 97, 254 = SozR 4-4200 § 22 No. 3).
1.1 – BSG, Judgment of 17.12.2009, Case No. B 4 AS 27/09 R
The appropriate size for an apartment for a 2-person household in the Essen area is 60 square meters; neither health reasons nor the decades-long family ties to the Essen-Kettwig district make it unreasonable in this specific case to leave the social environment, i.e., to move within the entire comparison area as a cost-saving measure.
The Higher Social Court (LSG) of North Rhine-Westphalia correctly determined the appropriate size of an apartment for a person receiving assistance under the German Social Code, Book II (SGB II), to be 60 square meters, in accordance with Section 5.7.1.b) of the Administrative Regulations on Housing Allocation (VV-WoBindG) (Circular of the Ministry for Urban Development and Housing, Culture and Sport, Official Gazette for the State of North Rhine-Westphalia of March 8, 2002, pp. 396, 400). The LSG's reference to the fact that the Circular of the Ministry for Construction and Transport of January 26, 2006 (IV A 2 – 2010 – 02/06 – Annex 1 WFB: Urban Planning and Technical Funding Requirements, Section 1.4.1) specifies an apartment size of 62 square meters for two-room apartments in newly constructed, "barrier-free" apartments does not alter this finding. Regardless of whether, as the Higher Social Court (LSG) argues, this is merely a provision to be observed when creating new rental housing, this regulation must be disregarded because it links the size of the apartment solely to the number of rooms. However, this is not the standard for apartment size applicable to benefits under the German Social Code, Book II (SGB II) (see Federal Social Court (BSG), judgment of February 19, 2009 – B 4 AS 30/08 R). The decisive factor is the number of people living in the apartment. Only this determines the appropriate apartment size. The circular from 2006 contains no provision in this regard, so the regulations from 2002 continue to apply.
Contrary to the plaintiffs' assertion, the social environment only determines the abstract limit of reasonableness insofar as the comparison area is defined by the place of residence of the person in need of assistance. The protection of the social environment, however, is not subject to the determination of the abstract reasonableness of the rent. Rather, the prerequisites for the protection of the social environment are only to be examined within the framework of concrete reasonableness (see also the decision of the Federal Social Court, judgment of December 17, 2009 – B 4 AS 50/09 R), i.e., when considering the question of what is reasonable or the possibility of taking cost-reduction measures, such as relocation within the meaning of Section 22 Paragraph 1 Sentence 3 of the German Social Code, Book II (SGB II).
In its decision of February 19, 2009 (B 4 AS 30/08 R), the deciding Senate listed examples of circumstances that may preclude the reasonableness of a move. These examples should be supplemented by the possibility of a restriction of the ability to move due to health reasons – including those that do not lead to the need for care. For instance, an illness may necessitate remaining in the current residence because it is equipped with assistive devices tailored to the specific health situation of the individual requiring assistance. Other health limitations, such as impaired walking and mobility, combined with a support system established within the individual's social environment to compensate for these limitations, may also mean that the only viable alternative for moving is within the narrowly defined social circle. Therefore, the legality of reducing benefits would depend on whether a move within the social circle is feasible because sufficient rental housing is available there at the reference rent
Likewise, the unreasonableness of cost-cutting measures cannot be justified by a long employment history. It is irrelevant that the plaintiffs had to rely on social benefits to secure their livelihood even before receiving benefits under Book II of the German Social Code (SGB II). Rather, the decisive factor is that the SGB II system, within the framework of cash benefits, only acknowledges the transition from entitlement to unemployment benefit II (Alg II), i.e., after a longer period of employment subject to social security contributions, by granting a temporary supplement pursuant to Section 24 of SGB II and, in the case of income from employment or other social benefits during the period of benefit receipt, by the allowances pursuant to Section 11 Paragraph 2 of SGB II. This proximity to employment or social security benefits is not reflected in housing allowances, unless the continuation or commencement of employment undertaken during or ending the receipt of unemployment benefit II would be jeopardized by a move, or the reason for the unreasonableness could be found in the receipt of the other social benefit (only a minor supplement through unemployment benefit II, receipt of a partial disability pension, etc.). However, there is no evidence of this in the present case.
On the other hand, the preceding explanations show that long-term employment does indeed lead to differentiated treatment under the German Social Code, Book II (SGB II). SGB II benefits following employment can be higher than those without a link to employment. Furthermore, employment accompanying the receipt of SGB II benefits influences the income situation of the person receiving assistance or can affect the reasonableness of cost-reduction measures. Therefore, for this reason alone, there is no discrimination against those who were or are currently employed compared to those who have never been employed, as defined in Article 3, Paragraph 1 of the German Basic Law (GG).
1.2 – Federal Social Court (BSG), Judgment of October 28, 2009, Case No. B 14 AS 64/08 R
Partial payments on a severance payment and tax refunds can eliminate the need for assistance under the German Social Code, Book II (SGB II). A one-time payment received after the application is submitted remains legally considered income beyond the month of receipt and the benefit period and does not become an asset in the month following receipt. There are no constitutional concerns. Considering these payments as income does not infringe upon property rights protected by Article 14 of the German Basic Law (GG).
The German Social Code, Book II (SGB II), does not itself make a distinction between income and assets. According to the jurisprudence of the Federal Social Court (BSG), income within the meaning of Section 11 Paragraph 1 of the German Social Code, Book II (SGB II) is generally everything of value that someone receives after submitting an application, and assets are what they already possessed before submitting the application (see judgments of the Senate of July 30, 2008 – in particular B 14 AS 26/07 R, scheduled for publication; judgment of September 30, 2008 – B 4 AS 29/07 R – BSGE 101, 291 = SozR 4-4200 § 11 No. 15, each at paragraph 18: income tax refund; judgment of March 3, 2009 – B 4 AS 47/08 R: severance pay; judgments of May 7, 2009 – B 14 AS 4/08 R and B 14 AS 13/08 R: transitional allowance). The starting point is generally the actual inflow, unless a different inflow is legally determined to be decisive (normative inflow).
The decisive factor for differentiating between income and assets is the actual receipt of funds, which also applies to partial payments of severance pay and tax refunds. In both cases, these are not previously acquired earnings used to accumulate assets (see Federal Social Court [BSG], judgments of September 30, 2008 – B 4 AS 57/07 R, of March 3, 2009 – B 4 AS 47/08 R – and of May 13, 2009 – B 4 AS 49/08 R). With regard to severance pay, its very nature as compensation for the loss of future earning opportunities precludes its temporal allocation to the employment relationship and thus to the past (see Federal Social Court [BSG], judgment of March 3, 2009 – B 4 AS 47/08 R; Voelzke in Küttner, Personalbuch 2009, 16th ed., Severance Pay, para. 52). In the case of income tax refunds, the rule of actual receipt as the differentiating criterion between income and assets cannot be deviated from simply because the cash inflow is one for which the underlying claim would have become due at an earlier date had the refundee made a different tax arrangement (Federal Social Court, judgment of May 13, 2009 – B 4 AS 49/08 R). In principle, when a claim is satisfied, the assessment must focus solely on the income ultimately received in monetary terms, and not on the fate of the claim itself (see judgments of the Senate of July 30, 2008 – in particular B 14 AS 26/07 R, scheduled for publication; judgments of May 7, 2009 – B 14 AS 4/08 R and B 14 AS 13/08 R: transitional allowance). Just as the 4th Senate of the Federal Social Court (judgment of May 13, 2009 – B 4 AS 49/08 R) did, the Senate here also sees no case in which a due and liquid claim was deliberately not asserted but rather saved. Rather, as the Federal Administrative Court (BVerwG) has ruled, it must be assumed that the recipient of the refund did not voluntarily (and interest-free) "save" the overpaid tax, but simply did not receive it earlier (cf. BVerwGE 108, 296, 301). The very lack of interest on the unpaid income demonstrates that the tax refund is not a form of "asset accumulation." Furthermore, the available tax options, such as the registration of a tax-free allowance, clarify that the tax refund is not a return of assets (BSG, ibid.).
The partial severance payments, like the tax refund, do not fulfill the unambiguous exception clause of Section 11 Paragraph 1 Sentence 1 Half-Sentence 2 of the German Social Code, Book II (SGB II) (Federal Social Court, judgments of March 3, 2009 – B 4 AS 47/08 R – and of May 13, 2009 – B 4 AS 49/08 R). They are neither a basic pension under the Federal War Victims' Relief Act (BVG) nor a benefit under the Federal Compensation Act (BEntschG). With the regulation in Section 11 Paragraph 1 SGB II, the legislator intended to link it not to the law on unemployment assistance, but to the Federal Social Assistance Act (BSHG) (Section 76) (cf. Bundestag Printed Matter 15/1514, p. 65, on Section 77, which corresponds to Section 82 of the German Social Code, Book XII (SGB XII); Bundestag Printed Matter 15/1516, p. 53).
Severance payments are not exempt from being considered as income of the person in need of assistance under Section 11 Paragraph 3 Number 1 Letter a of the German Social Code, Book II (SGB II) (Federal Social Court, Judgment of March 3, 2009 – B 4 AS 47/08 R). According to Section 11 Paragraph 3 Number 1 of the SGB II, receipts are not to be considered as income insofar as they serve a purpose other than benefits under the SGB II (letter a) or are earmarked income or donations from non-profit welfare organizations (letter b) and do not improve the recipient's situation to such an extent that benefits under this book would no longer be justified. Furthermore, according to Section 11 Paragraph 3 Number 2 of the SGB II, compensation paid for non-pecuniary damages under Section 253 Paragraph 2 of the German Civil Code (BGB) is not to be considered as income.
The purpose of Section 11 Paragraph 3 Number 1 Letter a of the German Social Code, Book II (SGB II) is, on the one hand, to prevent the specific purpose of a benefit from being undermined by its consideration within the framework of the SGB II, and on the other hand, to avoid duplicate benefits for an identical purpose (Federal Social Court [BSG], Judgment of December 6, 2007 – B 14/7b AS 62/06 R – Paragraph 24). The specific purpose can arise from a public law provision (cf. BSG, Judgment of December 6, 2007 – B 14/7b AS 16/06 R – BSGE 99, 240 = SozR 4-4200 § 11 No. 8, each paragraph 16), but also from a private law basis (BSG, Judgment of March 3, 2009 – B 4 AS 47/08 R – Paragraph 20). The latter follows from the broad wording of Section 11 Paragraph 3 No. 1 Letter a of the German Social Code, Book II (SGB II), which differs in this respect from the similar provision in social assistance law, which, according to Section 83 Paragraph 1 of the German Social Code, Book XII (SGB XII), requires a purpose expressly stated in public law regulations (see Federal Social Court (BSG), judgment of December 6, 2007 – B 14/7b AS 16/06 R – BSGE 99, 240 = SozR 4-4200 § 11 No. 8, each paragraph 16).
A benefit provided on a private-law basis is considered earmarked within the meaning of Section 11 Paragraph 3 Number 1 Letter a of the German Social Code, Book II (SGB II), if, beyond the repayment designation, a specific purpose is recognizably assigned to it. The deciding panel understands this, in accordance with the 4th Senate of the Federal Social Court (BSG), as an agreement from which it is objectively evident that the benefit is to be used for a specific purpose (private-law purpose) and denies this in the case of severance payments (see judgment of March 3, 2009 – B 4 AS 47/08 R).
The systematic classification of earmarked income alongside benefits from non-profit welfare organizations (§ 11 para. 3 no. 1 letter b SGB II), which are also not considered income, and compensation under § 253 para. 2 BGB (§ 11 para. 3 no. 2 SGB II) – i.e., so-called pain and suffering damages – precludes classifying severance payments due to job loss as "earmarked income" in this sense (BSG, loc. cit.). Severance payments constitute both intangible and tangible compensation for job loss (cf. BSG SozR 4100 § 138 no. 18 p. 100). They are intended to compensate the employee for being unable to continue their previous employment and thus being prevented from earning wages from it in the future (BSG SozR 4-2400 § 14 no. 8 para. 15). While severance payments do have a certain intangible component, they also compensate for the loss of earned income and thus have a tangible character. The payment is earmarked only insofar as it is intended to satisfy the former employee's severance claim; there is no further purpose for its use. The employer pays the severance because the employee has lost their job. Therefore, there is no specific purpose attached to the payment with regard to how the employee uses it (Federal Social Court, Judgment of March 3, 2009 – B 4 AS 47/08 R – para. 22).
The 4th Senate of the Federal Social Court (BSG) correctly clarified in its judgment of March 3, 2009, that the legislative history of Section 11 of the German Social Code, Book II (SGB II) also argues against including severance payments under Section 11 Paragraph 3 No. 1 Letter b of the SGB II and thus privileging them (BSG ibid., RdNr 23).
There are no constitutional concerns. Considering the payments as income does not infringe upon property rights protected by Article 14 of the Basic Law. Any impairment is precluded because both the severance payment and the tax refund were received by the plaintiff in full. The fact that these actually received funds are taken into account in the means test does not lead to a "devaluation" of property rights. The legislature also acted within its discretionary powers when it did not include a provision corresponding to Section 138 Paragraph 3 Number 6 of the Employment Promotion Act and Section 194 Paragraph 3 Number 7 of the Social Code, Book III, in the Social Code, Book II (see Federal Social Court, Judgment of March 3, 2009 – B 4 AS 47/08 R – Paragraph 24).
No violation of Article 3 Paragraph 1 of the Basic Law (GG) is apparent from the consideration of the tax refund. The fact that the plaintiff could have used the income differently, particularly to satisfy needs above the socio-cultural subsistence level, had it been received at a time when he was not claiming means-tested benefits, does not constitute a violation of the principle of equality. The amount wrongly withheld – in retrospect – was available to the plaintiff for repayment just as it would have been had the higher taxes not been collected. The crucial difference lies in the fact that, at the time of payment, the plaintiff was claiming benefits under Book II of the German Social Code (SGB II), which, for all those receiving assistance, require a means test that includes the income to be considered under Section 11 of SGB II (see the Senate's judgment of July 30, 2008 – B 14/7b AS 12/07 R – paragraph 26).
3. A one-time payment received after the application has been submitted remains legally considered income beyond the month of receipt and the benefit period and, contrary to the plaintiff's view, does not become an asset in the month following the month of receipt. The deciding panel agrees with the 4th Senate of the Federal Social Court (BSG) that the legal effect of the "inflow principle" does not end with the month of receipt, but extends over the so-called "distribution period" (BSG, Judgment of September 30, 2008 – B 4 AS 29/07 R – BSGE 101, 291 = SozR 4-4200 § 11 No. 15, paragraph 21 in each case). The distribution period generally begins with the receipt of the one-time payment (exception: Section 2 Paragraph 3 Sentence 2 of the Regulation on Unemployment Benefit II (Alg II-V) as amended on August 22, 2005) and initially covers the entire benefit period (Federal Social Court, loc. cit.). During this period, the payment, which qualifies as income, remains income and is therefore generally to be distributed to cover the need for assistance until it is consumed. The specific rules governing this distribution are set out in Section 2 Paragraph 3 of the Regulation on Unemployment Benefit II (Alg II-V) in the version applicable to the respective benefit period – or, in the case of a rejection of benefits, for the period following the reapplication.
The severance payments and the tax refund are to be considered as one-off income pursuant to Section 2 Paragraph 3 Sentence 1 of the 2004 Ordinance on Unemployment Benefit II (Alg II-V 2004, Federal Law Gazette I 2622) from the month in which they are received and are generally to be allocated to cover the need for assistance until they are consumed. According to Section 2 Paragraph 3 Sentence 2 of the Alg II-V 2004, benefits to secure subsistence are not to be provided for the number of full days that result from dividing the total monthly income (after deducting allowances and deductions) by the calculated need, including the contributions payable for voluntary continued health and long-term care insurance. In this case, the daily need of €31.74 (€952.28 / 30 = €31.74) was increased by the contributions for voluntary continued health and long-term care insurance, which, according to the findings of the Higher Social Court, amounted to €4.39 per calendar day. The daily allowance of €36.13 was offset in April 2005 by total income of €1,462.29 (€1,500 less a €30 insurance allowance and €7.71 for motor vehicle liability insurance pursuant to Section 11 Paragraph 2 No. 3 of the German Social Code, Book II (SGB II) in conjunction with Section 3 No. 1 of the 2004 Ordinance on Unemployment Benefit II (Alg II-V)). Therefore, the partial severance payment on April 15, 2005, eliminated the plaintiff's entitlement to benefits for 40 days (€1,462.29 / 36.13 = €40.47). In May 2005, the plaintiff earned an income of €2,700.95 (severance payment of €1,250 + €1,488.66 tax refund, from which €37.71 insurance premiums were again deducted). This meant that the plaintiff's claim was invalidated for a further 74 days, i.e., for the entire period in dispute.
It is unnecessary to decide whether and in which cases the wording in Section 2 Paragraph 3 Sentence 2 of the 2004 Ordinance on Unemployment Benefit II (Alg II-V 2004) implies that, in cases of particular hardship, a deviation from the standard calculation method is permissible (regarding the nature of "should" provisions, see Federal Social Court (BSG), Judgment of May 30, 2006 – B 1 KR 17/05 R – SozR 4-3100 § 18c No. 2, Paragraph 43), as no particular hardship is apparent. No reason is discernible why considering partial severance payments, contrary to the general rule that benefits are to be used to cover needs for a uniform period beginning in the month of receipt, should constitute a particular hardship (BSG, Judgment of March 3, 2009 – B 4 AS 47/08 R). The tax refund also provides no grounds for a different assessment from the standard case.
Even considering the developments in legislation after the period in dispute, there was no reason to deviate from the daily calculation of one-off income as provided for in Section 2 of the 2004 Ordinance on Unemployment Benefit II (Alg II-V 2004). While Section 2, Paragraph 3 was amended by the First Ordinance Amending the Unemployment Benefit II/Social Assistance Ordinance of August 22, 2005 (Federal Law Gazette I, p. 2499) to the extent that the monthly principle now applies, this amendment stipulates that one-off income must be distributed over a reasonable period and included in the monthly calculation with a corresponding partial amount, unless a different arrangement is warranted in a specific case. According to the unofficial justification for the amendment, the primary aim of the revision was to minimize administrative costs, particularly with regard to the necessity of voluntary continued insurance coverage in the event of the complete cessation of benefits under the German Social Code, Book II (SGB II). While the version of Section 2 Paragraph 3 Sentence 2 of the 2004 Regulation on Unemployment Benefit II (Alg II-V) stipulated that the daily allowance was to be calculated by deducting contributions to voluntary continued insurance in the statutory health and long-term care insurance schemes, Section 2 Paragraph 3 Sentence 3 of the Alg II-V, as amended on August 22, 2005, apparently aims to extend the period of consideration, so that even with a lower monthly allowance, the obligation to pay insurance benefits is maintained through continued receipt of subsistence benefits. The objective of ensuring insurance coverage through statutory health and long-term care insurance even when one-off income leads to the loss of entitlement to benefits is thus achieved by both regulations. However, minimizing the administrative burden associated with registering and deregistering individuals for statutory health and long-term care insurance does not justify "bringing forward" the new regulation (see Federal Social Court [BSG], judgments of September 30, 2008 – B 4 AS 29/07 R – BSGE 101, 291 = SozR 4-4200 § 11 No. 15, each at paragraph 24 and – B 4 AS 57/07 R – paragraphs 29 et seq.; judgment of March 3, 2009 – B 4 AS 47/08 R – paragraph 28).
The provision of Section 2 Paragraph 3 of the 2004 Ordinance on Unemployment Benefit II (Alg II-V 2004) is also in accordance with the authorization. Section 13 Sentence 1 Number 1 and Sentence 2 of the German Social Code, Book II (SGB II) (as amended by the Fourth Act for Modern Services on the Labor Market of December 24, 2003, Federal Law Gazette I 2954) authorized the Federal Ministry of Economics and Labour, in agreement with the Federal Ministry of Finance and the Federal Ministry of Health and Social Security, to determine by statutory instrument, without the consent of the Federal Council, which additional receipts are not to be considered income and how income is to be calculated in detail. The provision of Section 2 Paragraph 3 of the 2004 Ordinance on Unemployment Benefit II (Alg II-V 2004) remains within the scope of this authorization. The consideration of one-off receipts from the month of receipt, as provided for in Section 2 Paragraph 3 of the 2004 Ordinance on Unemployment Benefit II (Alg II-V 2004), corresponds to the monthly consideration of needs and income stipulated by the SGB II. The provision of Section 2 Paragraph 3 Sentence 2 of the German Social Code, Book II (SGB II) 2004, refers to the daily calculation of benefits according to Section 41 Paragraph 1 Sentence 1 of the SGB II.
Section 13 No. 1 of the German Social Code, Book II (SGB II) satisfies the requirements for statutory authorizations under Article 80 Paragraph 1 of the Basic Law (GG) (see also the Senate's judgment of October 28, 2009 – B 14 AS 55/08 R). According to this provision, the Federal Government, a Federal Minister, or the state governments may be authorized by law to issue statutory instruments. The content, purpose, and scope of the authorization must be defined in the law. Section 13 SGB II meets these requirements for the definiteness of the authorization provision. While the provision itself does not specify the criteria by which the issuing authority should calculate and consider income, it is sufficient that the content, purpose, and scope of the authorization can be inferred using general principles of interpretation, in particular from the purpose, the context, and the legislative history (BVerfGE 80, 1, 21). Such principles arise with sufficient clarity from the systematic structure of the SGB II and the law's connection to the legal situation under the BSHG (cf. BSG SozR 4-4225 § 2 No. 1 RdNr 14-15; Mecke in Eicher/Spellbrink, SGB II, 2nd ed. 2008, § 13 RdNr 7 with further references).
2. State Social Court Berlin-Brandenburg L 25 B 1474/08 AS PKH, decision of 25.02.2010, legally binding
According to Section 22 Paragraph 1 Sentence 4 of the German Social Code, Book II (SGB II), repayments and credits attributable to the costs of accommodation and heating are already deducted when determining the need for benefits and are therefore not to be considered as income under Section 11 SGB II, which is then offset against the need. Section 22 Paragraph 1 Sentence 4 SGB II thus contains a conclusive special regulation regarding the effects under benefit law of the covered repayments and credits, which takes precedence over the provisions of Sections 11 and 12 SGB II (see Berlit in LPK-SGB II, 2nd edition, Section 22, marginal note 49; Federal Social Court (BSG), judgment of April 15, 2008 – B 14/7b AS 58/06 –; Higher Social Court (LSG) Berlin-Brandenburg, decision of October 22, 2007 – L 28 B 1050/07 AS NZB –).
3. Schleswig-Holstein State Social Court L 9 SO 5/09, Judgment of 09.12.2009
Recipients of benefits under the German Social Code, Book II (SGB II), are entitled to the purchase of a television as part of their initial furnishing allowance. However, they are not entitled to receive the purchase of a television as a cash benefit.
Benefits for initial furnishing of an apartment, including household appliances, cover all initial furnishing needs related to the apartment. This includes all furnishings and items necessary for running a household, in particular furniture, lamps, curtains, a stove, cooking pots, a vacuum cleaner, an iron, a refrigerator, and a washing machine. Furthermore, the provision of household goods and personal effects is also covered. Thus, the term "initial furnishing" encompasses the needs for all household items required for orderly household management and dignified living (see the identical provision in Section 23 Paragraph 1 Sentence 1 No. 1 of the German Social Code, Book Two – SGB II –: Higher Social Court of Saxony-Anhalt, Decision of February 14, 2007 – L 2 B 261/06 AS ER –; para. 25, with further references). A television set is a household-related furnishing item necessary for living in accordance with prevailing lifestyles. This was already recognized in the case law of the Federal Administrative Court under the provisions of Section 21 Paragraph 1a No. 6 of the Federal Social Assistance Act (BSHG), to which the legislator referred (Bundestag Printed Matter 15/1514, p. 60) (Federal Administrative Court, Judgment of December 18, 1997 – 5 C 7/95 –, BVerwGE 106, 99-105). Even under the Social Code, Book XII (SGB XII), a television set is considered one of the necessary household items for a household oriented towards prevailing lifestyles, simply because television is part of daily life (Federal Administrative Court, Judgment of December 18, 1997 – 5 C 7/95 – ibid.; Higher Social Court of Berlin-Brandenburg, Judgment of October 7, 2009 – L 18 AS 2221/07 –, para. 19). Televisions are now among the standard sources of information used in all social classes. Around 26 million households in Germany have a television at home, which corresponds to 95% of the total population (Federal Social Court, judgment of February 19, 2009 – B 4 AS 48/08 R – citing information from the Federal Statistical Office). Accordingly, television sets are also commonly found in households of lower-income groups than the relevant comparison groups. Therefore, a television is an integral part of living arrangements that reflect the prevailing lifestyles of lower-income groups. In this respect, it is also necessary for orderly and dignified household management. This includes not only the provision of the absolute necessities, but also those items that are usually found in households of lower income groups and thus represent the relevant socio-cultural standard that can also be claimed by recipients of benefits under the German Social Code, Book II (SGB II) and Book XII (SGB XII) (Frankfurt Social Court, judgment of May 28, 2009 – S 17 AS 388/06 –, para. 26).
A television set is not excluded from the initial equipment allowance under Section 31 Paragraph 1 Number 1 of the German Social Code, Book XII (SGB XII), simply because it serves to establish relationships with the outside world and to participate in cultural life. According to Section 27 Paragraph 1 of the SGB XII, the necessary means of subsistence include, in particular, food, accommodation, clothing, personal hygiene, household goods, heating, and personal needs of daily life. These personal needs of daily life also include, to a reasonable extent, relationships with the outside world and participation in cultural life. According to Section 28 Paragraph 1 of the SGB XII, the entire need for the necessary means of subsistence outside of institutions, with the exception of additional school-related benefits under Section 28a, benefits for accommodation and heating under Section 29, and special needs under Sections 30 to 34, is provided according to standard rates, which, according to Section 28 Paragraph 3 of the SGB XII, should be calculated in such a way that the needs under Paragraph 1 can be met. With the introduction of basic income support for jobseekers (SGB II) and basic income support for the elderly and unemployed (SGB XII), the system of various one-off allowances (e.g., for clothing, household goods, and other special occasions) provided for in the previous social assistance law under the Federal Social Assistance Act (BSHG) was abolished. Significantly increased standard rates have replaced it under SGB II and SGB XII. Relevant special needs are essentially limited to initial equipment allowances (housing, clothing, childbirth, and school trips). This addresses special needs that are not covered, or not covered to the necessary extent, by the standard rate (State Social Court of Saxony-Anhalt, decision of February 14, 2007 – L 2 B 261/06 AS ER -). The increase in the standard allowance compared to the previous Federal Social Assistance Act (BSHG) thus serves to maintain items acquired as part of the initial furnishing allowance, to repair or replace them if necessary, or to purchase items that are not absolutely essential for a life of human dignity and therefore do not have to be provided as part of the initial furnishing allowance. The classification of a need as household goods or as an item for satisfying personal needs of daily life does not preclude its provision as part of the initial furnishing allowance. Initial furnishings include furniture, curtains, cooking pots, etc., and thus, for example, household goods. The fact that Section 27 Paragraph 1 of the German Social Code, Book XII (SGB XII) considers household goods to be part of the necessary subsistence does not mean that household goods cannot also be provided as part of the initial furnishing allowance. The defendant's argument that a television set is a personal necessity for daily life, enabling social interaction and participation in cultural life, and therefore only covers standard benefits and cannot be provided as part of initial furnishing, is untenable. This approach also contradicts Section 28 Paragraph 1 of the German Social Code, Book XII (SGB XII), which stipulates that the entire cost of necessary subsistence is covered both by the standard benefit and by the special needs benefits listed in Sections 28a, 29, and 30 to 34 of the SGB XII. This provision explicitly states that necessary subsistence, i.e., what is required for a dignified life, is provided both by special needs benefits and by standard benefits. For initial furnishing, this means that it includes all devices and purchases absolutely essential for a life of human dignity, while the standard benefit is intended to cover additional purchases and to maintain or replace existing items. A television set of basic quality is part of a dignified life and should therefore be provided as part of the initial equipment.
The plaintiff is not entitled to receive €70.00 as a cash benefit for the purchase of a television. While the Social Court did determine through its own research that €70.00 is sufficient for a basic new television, Section 10 Paragraph 1 of the German Social Code, Book XII (SGB XII) stipulates that benefits are provided as services, cash benefits, or benefits in kind. Paragraph 3 of this provision states that cash benefits take precedence over benefits in kind unless otherwise specified in this book, or unless benefits in kind can achieve the objective of social assistance significantly better or more economically, or unless the beneficiaries so desire. Therefore, Sections 31(3), 10(1), and (3) of the German Social Code, Book XII (SGB XII) grant the benefit provider discretionary power to choose the type of benefit specified in Section 31(1) No. 1 SGB XII. This means that the benefit provider may provide the benefits specified in Section 31(1) No. 1 SGB XII as benefits in kind – including used television sets (Schleswig-Holstein Higher Social Court, decision of August 8, 2007 – L 9 B 426/07 NZB –, para. 9) – or as cash benefits, whereby lump sums may also be granted. The plaintiff thus has no legal entitlement to a specific benefit, but rather to the proper exercise of the discretionary power granted to the defendant in this case (see also Berlin-Brandenburg Higher Social Court, judgment of October 7, 2009 – L 18 AS 221/07, para. 13).
4. Social Court Karlsruhe S 16 AS 2693/09, Judgment of 25.02.2010
If spouses agree in a divorce agreement that one spouse's claim to pension equalization will be settled in money, the payment made in this way is a designated income that is not to be taken into account under the German Social Code, Book II (SGB II).
The pension entitlements subject to equalization under the pension equalization scheme are indeed assets that already existed in the assets of the spouse obligated to make the equalization payment. However, this does not lead to the classification of the equalization claim as assets of the spouse entitled to equalization. This is because the equalization claim only becomes due upon divorce (see Section 1587 of the German Civil Code in the version valid until August 31, 2009). The plaintiff therefore only received the lump-sum payment in terms of value during the current benefit period (see, for the distinction, Federal Social Court, judgment of September 30, 2008 – B 4 AS 29/07 R, para. 18 with further references).
However, this was a designated payment which, according to Section 11 Paragraph 3 No. 1 a) of the German Social Code, Book II (SGB II) and Section 1 Paragraph 1 No. 2 of the German Unemployment Benefit II Ordinance (ALG II-Verordnung), was not to be considered income and therefore could not be credited against the plaintiff's needs. Accordingly, third-party payments, insofar as they serve a purpose other than benefits under the SGB II and do not improve the recipient's situation to such an extent that additional benefits under the SGB II would no longer be justified, are not to be considered income. A benefit has a specific purpose in this sense if it is intended for a particular purpose, clearly approved by the legislator, which is not the provision of subsistence, such that it would be defeated if the recipient had to use the benefit for this purpose through income offsetting and was thereby prevented from using it for its intended purpose (cf. Hengelhaupt, in: HAUCK/NOFTZ, SGB II, 28th supplement 2009, § 11 para. 213 with further references). This is the case here.
The lump sum payment, as clearly defined in the court-recorded divorce agreement, serves to settle the plaintiff's claim to pension equalization. According to this purpose, the plaintiff received the equalization payment to enable her to establish her own private retirement provision instead of transferring pension entitlements. The lump sum payment was therefore not intended for current living expenses, but rather for building up private retirement savings. It was meant to compensate for the additional pension entitlements acquired during the marriage and represent a contribution from the divorced spouse to securing the plaintiff's livelihood in old age. This clear purpose is not identical to that of benefits under the German Social Code, Book II (SGB II), which serve to secure current living expenses. The defendant's objection that ongoing pension payments should also be considered income under Section 11 of the SGB II is therefore unfounded. This is because ongoing pension payments are not comparable to contributions intended to enable the building of retirement savings. The differing purpose of private pension schemes compared to benefits under the German Social Code, Book II (SGB II), is also confirmed by the preferential treatment of private pension plans with exclusion from asset assessment under Section 12, Paragraph 2, Sentence 1, No. 3 of the SGB II. The purpose of this regulation is to protect employable individuals in need of assistance from having to use assets intended for retirement savings to cover their current living expenses (see Mecke, in: EICHER/SPELLBRINK, SGB II, 2nd edition 2008, Section 12, marginal note 47 with further references). This demonstrates that the legislator fundamentally recognizes retirement savings as a purpose worthy of protection. Accordingly, the qualification of comparable benefits, for example in the case of employer contributions to employee savings plans within the framework of company pension schemes, is also recognized as earmarked income (see Rhineland-Palatinate State Social Court, judgment of 25 November 2008 – L 3 AS 118/07, paragraphs 31 et seq. with further references).
The defendant's objection that expenses for retirement savings can only be deducted from income under the conditions of Section 11 Paragraph 2 Sentence 1 Numbers 3 a) and 4 of the German Social Code, Book II (SGB II), does not preclude the classification of the lump-sum payment as earmarked income. This is because the present case does not concern the deduction of retirement savings expenses from eligible income, but rather the consideration of income as income within the framework of the SGB II. This cannot be done in the case of earmarked income. Furthermore, the statutory pension contributions paid by the plaintiff's former husband to build up the pension entitlements settled in the divorce agreement would be deductible from income pursuant to Section 11 Paragraph 2 Sentence 1 Number 2 of the SGB II.
Ultimately, it is irrelevant that the plaintiff did not use the lump sum payment for its intended purpose of retirement provision. This is already evident from the wording of Section 11 Paragraph 3 No. 1 a) of the German Social Code, Book II (SGB II), which requires a designated purpose, not necessarily the use of the funds for that purpose. Accordingly, neither a right of control nor the ability of the donor to influence the intended use is required. Rather, it is sufficient that the payment is granted for a specific reason and that it can generally be expected to be used for the intended purpose, even if the recipient is not necessarily bound to this (cf. Hengelhaupt, in: Hauck/Noftz, SGB II, 28th Supplement 2009, Section 11, marginal note 215 with further references). This was the case here, as the payment was made in lieu of a transfer of pension entitlements and was intended to fulfill the associated legal purpose at the time the divorce agreement was concluded.
If, on the other hand, the plaintiff had been forced to use the allocated amount for current living expenses, using it for retirement savings would have been impossible from the outset. This would ultimately mean that recipients of benefits under the German Social Code, Book II (SGB II), could not conclude divorce agreements of the present nature as an alternative to the statutory pension equalization without incurring financial disadvantages. It is precisely such outcomes that are prevented by the provision in Section 11, Paragraph 3, No. 1 a) of the SGB II.
The one-off payment from her former husband, which is thus to be classified as a designated income not related to the plaintiff's ongoing living expenses, does not, given its amount and the purpose of the payment (retirement provision), have such a favorable effect on the plaintiff's situation that benefits under the German Social Code, Book II (SGB II) would not have been justified.
5. Social Court Duisburg S 31 AS 159/08, Judgment of 03.12.2009
Repayment notices must be sufficiently specific in their content. The reversal of the payments must be carried out in such a way that the notice – even if only with the aid of relevant attachments (cf. Engelmann, in: von Wulffen, SGB X, 6th edition 2008, § 33, marginal notes 3, 4) – clearly indicates the exact amount by which benefits are being withdrawn or revoked for each month for each affected person in need.
2. The pension income must be adjusted by the pensioner's notional personal needs – here the standard rate according to § 20 para. 3 SGB 2, the share attributable to him for accommodation and heating and insurance expenses.
3. The legally defined minimum subsistence level is irrelevant for determining the pensioner's notional needs. This does not contradict the Basic Law.
4. In principle, Section 45 of the German Social Code, Book Ten (SGB X), is a provision that requires the exercise of discretion. This applies to both retroactive and future revocations. Only under the conditions of Section 45, Paragraph 2, Sentence 3 of the SGB X, does Section 330, Paragraph 2 of the German Social Code, Book Three (SGB III) preclude the exercise of discretion.
7. Social Court Speyer S 6 AS 239/08, legally binding judgment of 11.01.2010
The agency providing benefits under the German Social Code, Book II (SGB II), must cover the telephone registration fees as moving expenses when a person receiving assistance moves. This applies all the more if the agency has previously approved the moving expenses. Furthermore, the following must be covered as moving expenses: the rental of a moving van, the purchase of moving boxes, and the costs of helpers—all expenses that necessarily arise during the move and are directly or indirectly related to it.
8. How can cross-person sanctions be prevented based on the current version of Section 31 of the German Social Code, Book II (SGB II)?
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