Court ruling: Compensation of 3000 euros cannot be used to reduce social assistance
A woman who received €3,000 in compensation after a court case took an unreasonably long time cannot have her Bürgergeld (citizen’s allowance) reduced because of it, Germany’s Bundessozialgericht (Federal Social Court) has ruled.
The case began when the woman received €3,000 as compensation after legal proceedings against the Jobcenter (employment office) dragged on for too long. The Jobcenter treated the payment as regular income, suspended her benefits for several months, and demanded repayment of previously approved welfare payments.
However, the Bundessozialgericht (Federal Social Court) in Kassel overturned the decision, ruling that the compensation payment must not be counted as income. The judges explained that the money was intended to compensate for non-material damage, specifically the excessive delay of the legal process, rather than to cover living expenses.
The dispute originated from an earlier conflict between the couple and the Jobcenter regarding housing and heating costs. After the prolonged proceedings, the woman and her husband filed a claim for compensation. The legal dispute eventually ended with a settlement worth €4,200, of which €3,000 was credited to the plaintiff.
The Jobcenter responded by cancelling her Arbeitslosengeld II (unemployment benefit II) payments from June to September 2017 and demanded the money back. The court ruled that this action was unlawful because compensation for delayed proceedings has a different purpose than social benefits meant to cover everyday living costs.
The ruling also overturns a previous decision by the Landessozialgericht Niedersachsen-Bremen (Lower Saxony-Bremen State Social Court) and restores an earlier judgment by the Sozialgericht Hildesheim (Hildesheim Social Court), which had ruled in favor of the woman.
According to the court, the decision establishes an important principle for Bürgergeld recipients: not every payment automatically counts as income. If a payment is intended to compensate for a specific legal disadvantage rather than to support daily living expenses, it may remain exempt from benefit calculations.