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Decision of the Federal Constitutional Court
Important Elements of the German System on Social Benefits are Not Constitutional
to the long-term unemployed.
In february 2010 the German Federal Constitutional Court announced in Karlsruhe its decision that some very important parts of the German social welfare benefit system pertaining to long-term unemployed persons and their families are not constitutional. They do not comply with the requirement of our Constitution to guarantee a subsistence minimum that is in line with human dignity.
This Court decision is very important for the welfare system in Germany, but the Court did not change the whole system. The Court accepted the statistical model applied. The calculation of the standard benefit for a single adult is based on the expenditures of the lowest 20% of the single-person households, stratified according to their net income (lowest quintile), after omitting the recipients of social assistance. And the Court accepted that some of these expenditures are not fully considered. Only certain percentages of them are considered as expenditure that is relevant to the benefit. The Court also accepted that social benefits usually are paid in a lump sum.
Calculations Must be Transparent
However, the Court has now stipulated that these calculations must be made in a transparent manner based on reliable figures and plausible methods of calculation. This is a very important issue. In the past, regarding some very sensitive points, the administration changed some details when calculating the benefits in order to avoid increases. This will be very difficult for the Government to do in the future.
Children are Not Small Adults
The most important point of the Court’s decision refers to the benefits for children living in families of long-term unemployed persons. Presently, a child below the age of 6 gets 60% and a child below the age of 14 gets 70% of the adult rate. For years, Caritas Germany has been strongly proposing that the social allowances for a child are based on the actual needs of children. Today, the Court has criticised that the reduction by 30 or 40% is set freely without any empirical or methodical foundation. Children are not small adults. The necessary expenditures for schoolbooks, exercise books, calculators etc. must be taken into account. The Government now has to come up with a transparent procedure to calculate social allowances for children. Caritas Germany is especially glad about this element of the Court’s decision.
Adaptation According to the Retirement Pension Value is Not Constitutional
There is yet another important element. The basic social benefit is calculated every five years. However, the cost of living increases and without yearly adjustments the purchasing power of the social benefit decreases. Here the social law is very tricky. The annual adaptation is undertaken according to the retirement pension value, but in many years the pensions were not increased or the rate of change was below the rate of inflation. The Court has now declared that the adaptation according to the retirement pension value is not constitutional. Therefore, the Court protects the purchasing power of people who depend on social benefits.
Irrefutable Untypical Needs Must be Covered
The fourth and last important element of the decision refers to untypical needs. The statistical model and the lump-sum standard
benefit amount can only cover typical needs. Based on current social law, even irrefutable untypical needs are not covered.
The welfare workers of Caritas Germany are in contact with many long-term unemployed persons and their families who do have
such untypical needs. For example people who are very tall and who need over-size clothes which are much more expensive than
clothes for normal-size people. Or think of parents with children who suffer from neurodermatitis. Or somebody suffering from
HIV/AIDS. Part of the medicines they need is not covered by health care insurance. These people do have untypical needs which
are not and cannot be covered by a system based on average needs. The Court has now decided that these untypical needs must
be met.
Of course, the Court did not define a certain amount by which the standard benefit has to be increased. But certainly, the Government quite soon will have to present a system how they plan to calculate the benefit for children.
The law must be amended by the end of this year, as the Court requires. There will be a very lively debate on social assistance
and – we hope – also on political decisions that we need in order to combat poverty. Better education for children from migrant
families is very important. We need better child care facilities for children below the age of three so that single parents
have a chance to go to work.
Prof. Dr. Gerorg Cremer , Secretary General of German Caritas Association