In principle, the term “income” in Hartz IV refers to any income received by the beneficiary in the form of money. It does not matter where the funds come from. As a rule, any income received by Hartz IV recipients in addition to Arbeitslosengeld II is also calculated as income. In the calculation of the standard benefits, therefore, any deductible income is taken into account, after accounting for the tax free exemptions.
Information about income
The Hartz IV application must provide full and truthful information about the income and the personal assets of the applicant.
Whether and to what extent the stated income and assets are actually included in the requirements calculation, the responsible job center decides at its discretion and in accordance to the legal regulations. Missing or partial disclosures of income or assets should be avoided as the Jobcenter is entitled to obtain appropriate information from the authorities in the course of an automated data comparison. Incorrect data can lead to inconsistencies, so that those affected have to wait longer for the basic services or suffer legal disadvantages and as a result, their Hartz 4 benefits’ claim can be partially or completely rejected.
What is defined as ‘income’ in Hartz IV?
The following income sources are generally accepted:
- Income from non-self-employment (e.g., Minijob, part-time)
- Income from self-employment
- Money (for adults over 50 € per year) *
- Cash benefits from unemployment benefits or sick pay
- Income from real estate & land (e.g., rental income, lease)
- Capital income and interest income (for example, shares, funds)
- Agriculture and Forestry
- Maintenance (to be paid to children in the Community of Needs)
- Child allowance (for children in the community)
- Children’s allowance (for children in the community)
- Pensions (nursing homes, Riester retirement, etc.)
- tax returns
- Reimbursement of electricity costs (if not covered by the requirement)
Which income is not taken into account?
Income that is not taken into account is part of the so-called privileged income. This was regulated by the legislator in § 11a SGB II.
- Benefits under SGB II (Arbeitslosengeld II, Social Security, Supplementary Burdens, Special Needs),
- The basic rulers according to the Federal Law on Sickness, and those laws which find a foreseen application to the privileged income,
- Pensions or allowances under the Federal Law for the Protection of the Land (LGBT), which are paid for damage to body or health (up to the amount of the valid basic rents)
- So-called one-euro jobs, since this activity is not considered to be compulsory for social insurance purposes, and benefits are not earned by a regular employment contract.
Special – non-creditable – income:
- Revenue up to 10 Euro per calendar month,
- Non-taxable income from basic and home care services,
- The foreign-use surcharge and the performance surcharge for soldiers,
- The homeowner’s allowance can be proved to the extent that it is used to finance a property,
- Children up to 16 years old receive the social allowance and their income from employment does not exceed EUR 100 per month,
- Meals provided outside the categories of income referred to in Sections 2, 3 and 4 (4)
- Pocket money according to § 2 paragraph 1 number 3 of the youth voluntary service law up to 60 €, which receives a participant in a youth voluntary service,
- Money gifts for children as long as they do not exceed an appropriate level as well as money gifts with a cultural background (youth ordination, confirmation, communion, Christmas or similar religious festivals), if these do not exceed € 3,100 per year.
Income from employment
Hartz IV recipients can earn income from a non-independent or self-employed activity so as not to lose contact with the labor market. This is expressly desired by the legislature, since people entitled to benefits from a mini-, midi- or part-time job can contest part of their livelihoods themselves, thus, reducing their need for assistance. The provisions of the Social Security Code (SGB II) take account of the income from employment and ensure that the person who is employed is more disposable than the person who does not work. This income will be accounted for in the light of the exemptions.
Income of self-employed
In the case of Hartz IV recipients who are self-employed, so-called Hartz IV “Aufstocker”, the income is calculated as a rule, taking the allowances into account. The credit assessment is based on the tax authority’s income statement, as well as, a profit and loss cost statement, which enables the job center to compare the income and expenditure and determine the needs of the person in need. The date of the income statement is the date on which the income actually flowed, irrespective of contractually agreed deadlines and payment dates. Should there be any overlap in the disbursement of the Arbeitslosengeld II, since other income has been obtained or evidence of need to be found, the Jobcenter reserves the right to estimate and to recover any excess of sums paid.
Income of schoolchildren
Income of pupils of general or vocational schools who are under 25 years and who are employed in the school holidays for a maximum of 4 weeks per calendar year is not included if the income does not exceed the amount of € 1,200 per year.
Important: This does not apply to students who are eligible for training remuneration.
Pensions and other income
For other income, e.g. From social benefits, there are generally no exemptions. However, expenses may be deducted therefrom. In principle, other income is not included in the Arbeitslosengeld II. These include, for example, the basic pension according to the Federal Law on Provi- sion, the blind pay or the long-term care allowance.
Beneficiaries who receive one-off payments, such as a payroll tax or a collectively agreed Christmas allowance, will be charged in the month in which they enter the account. If the imputation of one-off revenues due to the amount would lead to the discontinuation of the benefits during this month, the income will be divided over a period of six months and pro rata.
You can find out which and how much income can be unaccounted under the following information about Income-Free Amounts.
In addition to the income, the assets are also taken into account to determine the needs of Hartz IV recipients. For more information, see Hartz IV Assets.