Income, deductions and assets
What is offset against the citizen’s money and what is not?
September 30, 2024, 6:49 a.m
Citizens’ money is intended to ensure people’s minimum subsistence level. Additional income can be added to this minimum. At least within certain limits. What can you keep and what will be charged?
More than five million people in Germany receive citizen’s benefit. The support paid by the job center ensures that job seekers and their families have the minimum subsistence level if they either no longer receive unemployment benefit or only receive so little that it is not enough to live on.
Citizen benefit recipients are allowed to earn additional money and have other income. However, these are offset against the basic security. Facts and figures about additional income, additional income and cuts that recipients of citizen’s benefit should know.
How much can I earn in addition to citizen’s money?
You are free to earn as much extra as you want. Maybe this income from work is even enough to cover your own living expenses again.
“If you’re lucky, you get out of the citizen’s money,” says Frank Lackmann, consultant at Caritas in Aachen. If that doesn’t work, working citizens’ benefit recipients will still have more money in their wallets, he says. Depending on what they are allowed to keep from their earnings.
How much of your earnings will be taken into account?
The Social Security Code (SGB II) regulates that income from employment must be counted towards citizen’s allowance. However, so-called deductions and allowances ensure that part of the additional income is regularly retained. A flat rate of 100 euros is always free. “It doesn’t matter how high the wages are,” says Frank Lackmann.
Percentage-based amounts are added on top. They are based on the level of earnings. Mini-jobbers, for example, can deduct 20 percent in addition to the 100 euros. For example, the calculation is: 520 euros minus the flat rate equals 420 euros, 20 percent of which is 84 euros, resulting in a total allowance of 184 euros. Mini-jobbers have this in their pockets as a plus to their citizen’s money.
Childless singles with a gross income of up to 1200 euros can achieve a maximum allowance of 348 euros. The amounts depend on the gross wage. However, since they are deducted from the net, the calculation becomes more complicated.
How much the job center cuts and what is actually left over is influenced, among other things, by marital status, children and their age, travel costs, insurance and taxes. Because it’s different for everyone, “the deduction amounts are always determined individually for each individual case,” explains Irmgard Pirkl from the Federal Employment Agency (BA). For initial guidance, the Federal Ministry of Labor has put an allowance calculator online.
By what income is the citizen’s benefit reduced?
According to SGB II, all income must be taken into account. This means that the support is reduced not only by additional income, but also by cash benefits from other sources. This includes child and parental benefits, maintenance, sickness and unemployment benefits, pensions, rental income, interest, dividends and severance pay.
The job center offsets the income against the respective needs that it has determined – in full. There are no allowances like there are for wages. If the additional income exceeds the need, no citizen’s money is usually approved.
What about child support and rent?
The citizen’s allowance includes the rental costs. Therefore, recipients generally do not receive any additional housing benefit. According to Frank Lackmann, job centers check whether citizens’ benefit or housing benefit is cheaper. If someone is in a better financial situation with housing benefit, he or she must apply for it as a priority.
Child benefit will be reduced in full. However, the standard citizen benefit rate for children is higher than the child benefit amount. This means a little more money is available for the offspring.
Parents also have the option of applying for the so-called child allowance instead of citizen’s benefit. According to Caritas consultant Lackmann, this social benefit is available if the income is sufficient for the parents but not for the children. The family then receives child benefit on top of that. Important: “The receipt of child allowance and housing benefit at the same time as citizen’s benefit is mutually exclusive.”
What income am I entitled to without reduction?
Some income will not be affected. For example, pensions, blind benefits, maternity benefits and benefits for war victims or victims of crime. Pupils can keep the money from holiday jobs without any reduction. Emergency aid in the event of disasters and so-called honorary gifts from the state on the occasion of important marriage anniversaries and birthdays are also available without deductions.
What happens to inheritances and home ownership?
Owner-occupied apartments are generally protected up to a size of 130 square meters, and private homes up to 140 square meters. Citizens’ benefit recipients are therefore allowed to remain in residence – provided the costs and burdens for accommodation are reasonable.
For rented apartments, the citizen’s benefit entitlement is reduced by the entire rental income. In the worst case scenario, those affected receive nothing. “Anyone who earns 2,500 euros in rent doesn’t need citizens’ money,” says Pirkl. In addition, rented properties were part of the assets and are probably worth more than the protected assets.
Waiting periods apply to inheritances and other assets such as stocks, valuable jewelry and savings. “In the first year of receiving citizen’s benefit, this will only be accessed if it is significant,” says the BA spokeswoman. The state then expects citizens’ benefit recipients to cover their living expenses from the assets before they apply 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 community of needs. After the waiting period has expired, the protective assets amount to 15,000 euros for each person who lives in the community of need. Any assets beyond this will be taken into account.
