Social law: A holiday allowance does not constitute qualifying income within the meaning of § 11 SGB II.

Düsseldorf Social Court, 18 October 2012, Ref.: S 10 AS 87/09

In order to receive ALG II (Hartz 4), the claimant must be in need of assistance within the meaning of § 9 Para. 1 SGB II. § Section 9 para. 1 SGB II stipulates this:

A person is in need of assistance if he or she cannot or cannot sufficiently secure his or her livelihood from the income or assets to be taken into account and does not receive the necessary assistance from others, in particular from relatives or from providers of other social benefits.

Conversely, all recipients of ALG II must use their own income or assets when assessing their need for assistance.

What income or assets are to be taken into account in individual cases is regulated in § 11 SGB II and § 12 SGB II.

According to § 11 para. 1 sentence 1 SGB II, income in cash or cash equivalents less the amounts to be deducted in accordance with § 11b, with the exception of the income specified in § 11a, must be taken into account as income in the ALG II claim.

Income from the following, for example, is offset against ALG II

- non-independent work,
- self-employed labour (the surplus generated),
- Commercial enterprise or
- Letting and leasing

With regard to the assets to be taken into account, § 12 SGB II stipulates that all realisable assets are to be taken into account as assets.

In the above-mentioned decision of the Düsseldorf Social Court, the court had to decide whether a one-off payment in lieu of holiday from the needy person's former employer was also countable income within the meaning of SGB II.

Facts of the Case At the end of her employment relationship, the 59-year-old plaintiff still had a remaining holiday entitlement, which was ultimately paid out in the form of a so-called holiday pay in the amount of approx. 400.00 € gross (approx. 300.00 € net).

The Solingen Job Centre was of the opinion that this amount was chargeable income within the meaning of § 11 SGB II and deducted this amount from the unemployment benefit II granted to the claimant and her husband.

The claimant brought an action against this deduction before the Düsseldorf Social Court.

Düsseldorf Social Court: The Düsseldorf Social Court agreed with the claimant and ordered the job centre to pay out the amount taken into account.

The court reasoned that the paid holiday pay was income earmarked for a specific purpose and should not be counted as income under the provisions of SGB II.

Rather, the holiday pay serves a different purpose than unemployment benefit II.

While the latter is intended to ensure the livelihood of the beneficiary as a state guarantee, the sole purpose of holiday pay is to compensate the (former) employee for the loss of holiday enjoyment for operational reasons.

The holiday pay should therefore be compared to a compensation payment that is paid to the recipient.
financially in a position to make up for the missed recovery phase through other activities (restaurant visits, wellness or similar).

In order not to undermine this purpose, the holiday pay should not be offset against unemployment benefit II.

Source: Düsseldorf Social Court

Note: The decision is not final. The defendant job centre has lodged an appeal with the regional social court.

It remains to be seen how case law will develop with regard to holiday compensation claims.

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