Unemployment > Hartz IV > Assets

Hartz IV: Assets

Definition, Explanation

One only receives benefits of the basic security for jobseekers, that is mostly unemployment benefit II and social money, if one is in need of support. That is fulfilled if one does not have enough income and assets to maintain a living. In the determination of need of support status, all incomes and assets of the household-unit are taken into account.

For calculation and granting of unemployment benefit II and social money, besides the income also assets inland and abroad are taken into account, as far as the assets are utilizable, meaning directly usable for living. It is utilizable if it can be used up, used as a security for lending, can be rented out or leased, in order to serve the living maintenance. Assets are not utilizable if they are hypothecated.

What counts as assets:

• cash
• assets on accumulation accounts
• savings
• building-savings
• savings certificates
• securities, stocks or funds
• cash-value life insurances
• real estate, landed property
• owned apartments
• real rights in land
• donations received within the last 10 years

What is not counted as assets are so-called privileged assets, or assets-to-spare:

• appropriate furniture and fixtures, that is, things that are usual or necessary for living and running a household
• appropriate automobile for every employment-capable person in need of support. The value of the automobile must not exceed € 7,500
• assets for old-age provision without a ceiling amount, if the person in need of support and / or the partner is / are exempt from the obligation to be insured in statutory pension insurance. If so, however, this must be certified, e.g. with an insurance policy
• appropriate owned apartment or house in which the person in need of support lives. Considered appropriate is an owned apartment up to 120 sqm or a house up to a living space of 130 sqm or owned land up to 500 sqm in the city or 800 sqm in the country
• assets for acquisition or maintenance of appropriate owned house and land for disabled or persons in need of nursing care
• things and rights whose utilization would obviously be uneconomic. If the yield from selling would be more than 10 % below the current actual value, this utilization is deemed uneconomic
• saved pain and suffering compensations

To be subtracted from the assets:

• Exempt amounts:
  Every member of a household-unit in need has an exempt amount of at least 3,100 Euros, respectively 150 Euros per year of age. So, a 38-year-old person has an exempt amount of 38x150 Euros = 5,700 Euros. The maximum amount for children is 3,100 Euros, for adults 9,750 Euros. Persons born before January 1 1948 have an exempt amount of 520 Euros per year of age and a maximum amount of 33,800 Euros
• Old-age provision from “Riester-savings”. Exemption: early using of this Riester-pension
• Other old-age provision: assets serving only old-age provision has to be subtracted from the assets amount taken into account, up to an exempt amount of 250 Euros per year of age of the person in need of support and also of his or her partner. However, any using of those assets before pension-age must be excluded by contract and irrevocably. The maximum amount is 16,250 Euros
• exempt amount for necessary acquisitions: 750 Euros per person in need of support in the household-unit in need of support

As long as assets exist, the owner does not receive unemployment benefit II or social money. The principle of immediate assets usage is applied, mening that the assets have to be used, before Hartz IV benefits can be received. Only if using of the assets is not possible or would be considered a special hardship, then unemployment benefit 2, respectively social money is granted in the form of a loan. Possibly, that loan must be secured e.g. by a mortgage. A case of special hardship is e.g. saved assets for a dignified funeral.

Tips, Checklist

• Ask your contact person in the ARGE or the labour agency what counts as appropriate furniture and fixtures
• Do not sell some assets in panic, before you apply for Hartz IV benefits
• Sort out first, what really counts as your assets and what does not
• Invest some of your assets in “appropriate” things for your household, like a PC or a new washing machine. These will not be taken away by the ARGE
• If your living space size is considered not appropriate, rent out single rooms
• The labour agency must not force you to sell certain things if the selling would be uneconomical
• Assets of children are Hartz IV resistant. However, the child will not be entitled to social money if it possesses assets of above 4,850 Euros
• Before you report your assets to the labour agency, you should list and sort your assets for yourself
• Possibly re-organize your assets before you apply for unemployment benefit II and social money
• In a household-unit in need of support, have separate bank accounts, and maybe contract subletting, so you do not have your assets reduced for other members of the household-unit in need of support
• Pay bank- and credit debts using your assets. This should be done before the application for Hartz IV benefits, since it reduces your assets
• Debts are not considered negative assets!
• Make sure that the accounts for the children are contracted on their names. Otherwise, they are considered parts of your assets and will only be without effect up to the exempt amount in the determination of assets
• Do not conceal existing assets of yours in your application for unemployment benefit II. The ARGE are allowed to reclaim benefits that you have already received

Last update: 03/29/2010