Federal Constitutional Court - Press office -
Press release no. 5/2009 of 9 February 2010
Judgment of 9 February 2010 – 1 BvL 1/09, 1 BvL 3/09, 1 BvL 4/09 –
Standard benefits paid according to the Second Book of the Code of
Social Law ("Hartz IV legislation") not constitutional
I. Facts of the case
1. With effect from 1 January 2005, the Fourth Act for Modern Services
on the Labour Market (Viertes Gesetz für moderne Dienstleistungen am
Arbeitsmarkt) of 24 December 2003 (the so-called „Hartz IV legislation“)
merged the (long-term) unemployment ass istance (Arbeitslosenhilfe) and
the social assistance benefits existing to date in the newly created
Second Book of the Code of Social Law (Sozialgesetzbuch Zweites Buch –
SGB II) in the shape of a uniform, means-tested basic provision for
employable persons and the persons living with them in a joint household
(community of need). Accordingly, employable needy persons receive
unemployment benefit II, and the non-employable dependants living with
them in a joint household, in particular children before completing the
age of 15, receive social allowance. These benefits are essentially made
up of: (1) the standard benefit paid to secure one’s livelihood, which
is determined in §§ 20 and 28 SGB II; and (2) benefits for accommodation
and heating. The benefits are only granted where no sufficient means of
one’s own, especially income or property, exist. Upon its entry into
force, the SGB II fixed the standard benefit for singles living in the
old West German states including East Berlin at €345. It determines the
standard benefit for the other members of the joint household as
percentages of this amount. This resulted as from 1 January 2005 in a
rounded amount of €311 (90 per cent) for spouses, civil partners and
live-in partners, in a rounded amount of €207 (60 per cent) for children
before completing the age of 14 and in an amount of €276 (80 per cent)
for children from the beginning of their 15th year of age.
In contrast to the provisions under the former Federal Social Assistance
Act (Bundessozialhilfegesetz – BSHG) the standard benefit according to
SGB II is largely paid as a lump sum; an increase for everyday need is
ruled out. Non-recurring assistance is only paid in exceptional cases
for a special need. To meet a need that recurs irregularly, the standard
benefit has been increased so that benefit recipients can save the
corresponding amount.
2. a) When fixing the standard benefit, the legislature took the social
assistance law, which has been regulated since 1 January 2005 in the
Twelfth Book of the Code of Social Law (Sozialgesetzbuch Zwölftes Buch –
SGB XII) as an orientation. Pursuant to the SGB XII and the Standard
Rate Ordinance (Regelsatzverordnung) issued by the competent Federal
Ministry, the assessment of the standard rates under social assistance
law is carried out according to a statistical model which had been
developed in a similar fashion when the BSHG was in force. The basis of
the assessment of the standard rates is a special evaluation of the
sample survey on income and expenditure which is conducted every five
years by the Federal Statistical Office. What is relevant for the
determination of the basic standard rate, which also applies to singles,
is the expenditure, compiled in the different divisions of the sample
survey, of the lowest 20 per cent of the single-person households
stratified according to their net income (lowest quintile) after leaving
out the recipients of social assistance. When assessing the basic
standard rate, this expenditure, however, is not fully considered; only
certain percentages of it are taken up as expenditure that is relevant
to the standard rate.
The Standard Rate Ordinance which has been in force since 1 January 2005
is based on the 1998 sample survey on income and expenditure. When
determining the expenditure that is relevant to the standard rate in §
2.2 of the Standard Rate Ordinance, division 10 of the sample survey on
income and expenditure (Education) has not been taken into account.
Further reductions were made for instance in division 03 (Clothing and
shoes) e.g. for furs and tailor-made clothes, in division 04 (Housing
etc.) with the expenditure item „Electricity“, in division 07
(Transport) due to the costs of motor vehicles and in division 09
(Leisure, entertainment and culture) e.g. for gliders. The amount
calculated for 1998 was projected to 1 January 2005 according to the
provisions that apply to the annual adaptation of the standard benefit
pursuant to the SGB II and of the standard rates pursuant to the SGB
XII, according to the development of the current pension value in the
statutory pensions insurance scheme (see § 68 SGB VI).
b) When fixing the standard benefit for children, the legislature
deviated from the percentages that were in force under the BSHG by
creating only two age groups (0 to 14 years and 14 to 18 years). At
first, the expenditure behaviour of married couples with one child was
not studied, as had been done under the BSHG.
3. The special evaluation of the sample survey on income and expenditure
from 2003 resulted in changes concerning the expenditure that is
relevant to the standard rate pursuant to § 2.2 of the Basic Rate
Ordinance as from 1 January 2007 but not in an increase of the basic
standard rate and the standard benefit for singles. A new special
evaluation conducted regarding the expenditure behaviour of married
couples with one child resulted in the legislature’s introducing a third
age group of children from the age of 6 until they complete the age of
14 living in the same household. As from 1 July 2009, they receive,
pursuant to § 74 SGB II, 70 per cent of the standard benefit of a single
person. Pursuant to § 24a SGB II, school-age children have received
since 1 August 2009, apart from this, additional benefits for school to
the amount of €100 per school year.
4. On 20 October 2009, the First Senate of the Federal Constitutional
Court conducted an oral hearing about a case submitted by the Higher
Social Court of Hesse (Hessisches Landessozialgericht) (1 BvL 3/09) and
about two cases submitted by the Federal Social Court
(Bundessozialgericht) (1 BvL 3/09 and 1 BvL 4/09) on the question of
whether the amount of the standard benefit for securing the livelihood
of adults and children until completing the age of 14 in the period
between 1 January 2005 and 30 June 2005 according to § 20.1 to 20.3 and
according to § 28.1 sentence 3 no. 1 alternative 1 SGB II is compatible
with the Basic Law. Detailed information about the original proceedings
on which the submissions are based is contained in the German press
release on the oral hearing (no. 96/2009 of 19 August 2009).
II. The Federal Constitutional Court’s decision
The First Senate of the Federal Constitutional Court has decided that
the provisions of the SGB II which concern the standard benefit for
adults and children do not comply with the constitutional requirement
following from Article 1.1 of the Basic Law (Grundgesetz – GG) in
conjunction with Article 20.1 GG to guarantee a subsistence minimum that
is in line with human dignity. The provisions remain applicable until
the legislature enacts new provisions, which it is ordered to do until
31 December 2010. The legislature is also ordered to make provision,
when enacting the new provisions, for securing an irrefutable current
special need which is not non-recurring for those entitled to receive
benefits according to § 7 of the Second Book of the Code of Social Law,
a need which has not yet been covered by the benefits pursuant to §§ 20
et seq. of the Second Book of the Code of Social Law but must
mandatorily be covered to guarantee a subsistence minimum that is in
line with human dignity. It is ordered that until the legislature enacts
new provisions, this claim can be asserted directly, taking into account
the grounds of the decision, on the basis of Article 1.1 GG in
conjunction with Article 20.1 GG, with the costs being borne by the
Federation.
In essence, the decision is based on the following considerations:
1. a) The fundamental right to guarantee a subsistence minimum that is
in line with human dignity, which follows from Article 1.1 GG in
conjunction with the principle of the social state under Article 20.1
GG, ensures every needy person the material conditions that are
indispensable for his or her physical existence and for a minimum
participation in social, cultural and political life. Beside the right
from Article 1.1 GG to respect the dignity of every individual, which
has an absolute effect, this fundamental right from Article 1.1 GG has,
in its connection with Article 20.1 GG, an autonomous significance as a
guarantee right. This right is not subject to the legislature’s disposal
and must be honoured; it must, however be lent concrete shape, and be
regularly updated, by the legislature. The legislature has to orient the
benefits to be paid towards the respective stage of development of the
polity and towards the existing conditions of life. As regards the types
of need and the means that are necessary to meet such need, the extent
of the constitutional claim to benefits cannot be directly inferred from
the constitution. It is for the legislature to lend it concrete shape;
it has latitude for doing so.
In order to lend the claim concrete shape, the legislature has to assess
all expenditure that is necessary for one’s existence consistently in a
transparent and appropriate procedure according to the actual need, i.e.
in line with reality.
b) The legislature’s latitude for assessing the subsistence minimum
corresponds to a cautious review of the provisions in non-constitutional
law by the Federal Constitutional Court. As the Basic Law itself does
not admit of exactly quantifying the claim, substantive review is
restricted, as regards the result, to ascertaining whether the benefits
are evidently insufficient. Within the material range which is left by
the review of evident faultiness, the fundamental right to guaranteeing
a subsistence minimum that is in line with human dignity cannot provide
any quantifiable guidelines. It requires, however, an examination of the
bases and of the assessment method of the benefits to ascertain whether
they do justice to the objective of the fundamental right. In order to
ensure a traceability of the extent of the statutory assistance benefits
that is commensurate with the significance of the fundamental right and
to ensure the review of the benefits by the courts, the assessment of
the benefits must be viably justifiable on the basis of reliable figures
and plausible methods of calculation.
The Federal Constitutional Court therefore examines: (1) whether the
legislature has taken up and described the objective of ensuring an
existence that is in line with human dignity in a manner that does
justice to Article 1.1 GG in conjunction with Article 20.1 GG; (2)
whether it has, within the boundaries of its latitude, chosen a
fundamentally suitable method of calculation for assessing the
subsistence minimum; (3) whether in essence, it has completely and
correctly ascertained the necessary facts; and finally (4) whether it
has kept within the boundaries of what is justifiable within the chosen
method and its structural principles in all stages of calculation, and
with plausible figures. To make this review by the Federal
Constitutional Court possible, the legislature is obliged to plausibly
disclose the methods and stages of calculation employed in the
legislative procedure. If the legislature does not sufficiently meet
this obligation, the ascertainment of the subsistence minimum is no
longer in harmony with Article 1.1 GG already due to these shortcomings.
2. The standard benefits of €345, 311 and 207 cannot be regarded as
evidently insufficient to secure a subsistence minimum that is in line
with human dignity. With regard to the amount of the standard benefit of
€345, it cannot be established that it is evidently below the
subsistence minimum because it is at least sufficient to secure the
physical aspect of the subsistence minimum and because the legislature’s
latitude is especially broad as regards the social aspect of the
subsistence minimum.
This also applies to the amount of €311 for adult partners in a joint
household. The legislature was allowed to assume that living in a joint
household reduces expenditure and that therefore, two partners living
together have a financial minimum need that is lower than twice the need
of a person living alone.
It also cannot be established that the amount of €207 which uniformly
applies to children before completing the age of 14 is evidently
insufficient to secure a subsistence minimum that is in line with human
dignity. In particular, it is not apparent that this amount is not
sufficient to cover the physical subsistence minimum, especially the
need for food, of children between 7 and 14 years of age.
3. The statistical model which applies to the assessment of the standard
rates under social assistance law and which according to the will of the
legislature is also the basis for the assessment of the standard benefit
is a justifiable, and hence constitutionally permissible, method for
realistically assessing the subsistence minimum for a single person.
Moreover, it is based on suitable empirical data. The sample survey on
income and expenditure reflects the expenditure behaviour of the
population in a statistically reliable manner. The choice of the lowest
20 per cent of the single-person households stratified according to
their net income after leaving out the recipients of social assistance
as the reference group for ascertaining the standard benefit for a
single is constitutionally unobjectionable. The legislature could also
justifiably assume that the reference group on which the evaluation of
the 1998 sample survey on income and expenditure was based was situated
above the social assistance threshold in a statistically reliable
manner.
It is also constitutionally unobjectionable that the expenditure of the
lowest quintile ascertained in the different divisions of the sample
survey on income and expenditure is not fully considered but that only a
certain percentage of it is considered, as expenditure that is relevant
to the standard benefit, for assessing the standard benefit. The
legislature, however, has to take the decision as to which expenditure
is part of the subsistence minimum in an appropriate and justifiable
manner. The reduction of expenditure items in the divisions of the
sample survey on income and expenditure require an empirical basis for
their justification. The legislature may only regard expenditure which
the reference group incurs as not relevant if it is certain that it can
be covered otherwise or if it is not necessary to secure the subsistence
minimum. To ascertain the amount of the reductions, an estimate is not
ruled out if it is performed on a sound empirical basis; estimates
conducted “at random” are, however, not a realistic way of ascertaining
the amount.
4. The standard benefit of €345 has not been ascertained in a
constitutional manner because the structural principles of the
statistical model have been abandoned without a factual justification.
a) The expenditure that fixed in § 2.2 of the Standard Rate Ordinance
2005, which is relevant to the standard rate and thus at the same time
to the standard benefit, is not based on a viable evaluation of the
sample survey on income and expenditure 1998. For with regard to some
expenditure items, percentage reductions for goods and services which
are not relevant to the standard benefit (e.g. furs, tailor-made clothes
and gliders) were made without it being certain whether the reference
group (lowest quintile) has incurred such expenditure at all. With
regard to other expenditure items, reductions were made which are
justifiable on the merits, but which were not empirically substantiated
as regards their amount (e.g. a 15 per cent reduction for the item
“Electricity”). Other expenditure items, e.g. division 10 (Education),
were completely left out of account, without any reasoning for this
being provided.
b) Apart from this, the projection of the amounts ascertained for 1998
to the year 2005 on the basis of the development of the current pension
value constitutes an inappropriate change of standard. While the
statistical method of ascertainment focuses on net income, consumer
behaviour and cost of living, the projection according to the current
pension value is based on the development of gross wages and salaries,
on the contribution rate to the general pensions insurance and a
demographic factor. These factors, however, show no relation to the
subsistence minimum.
5. The ascertainment of the standard benefit to the amount of €311 for
partners living together in a joint household does not meet the
constitutional requirements because the shortcomings which have become
apparent with regard to the ascertainment of the standard benefit for
singles are continued for the standard benefit for partners was
ascertained on the basis of the standard benefit or singles. However,
the assumption that an amount of 180 per cent of the corresponding need
of a single is sufficient to secure the subsistence minimum of two
partners has indeed a sufficient empirical basis.
6. The social allowance of €207 for children before completing the age
of 14 does not meet the constitutional requirements because it is
derived from the standard benefit to the amount of €345 which has
already been objected to. Furthermore, its determination is not based on
any justifiable method of determining the subsistence minimum of a child
before completing the age of 14. The legislature has not ascertained the
specific need of a child in any way, which, in contrast to that of an
adult, has to take a child’s stages of development and a development of
personality that is appropriate for children into account. Its reduction
of 40 per cent from the standard benefit of a single is set freely
without an empirical and methodical foundation. In particular, the
necessary expenses for schoolbooks, exercise books, calculators etc.,
which are part of the existential need of a child, are left out of
account. For without these costs being covered, children in need of
assistance are under the threat of being excluded from chances in life.
What is missing as well is a differentiated survey of the need of
younger and older children.
7. These infringements of the constitution have neither been eliminated
by the evaluation of the sample survey on income and expenditure 2003
and the new determination of the expenditure that is relevant to the
standard rate as from 1 January 2007 nor by § 74 and § 24a SGB II, which
came into force in the middle of 2009.
a) The amendment of the Standard Rate Ordinance, which has entered into
force as from 1 January 2007, has not eliminated essential shortcomings
such as for instance the fact that the expenditure recorded in division
10 (Education) was not taken into account, or the projection of the
amounts ascertained for 2003 according to the development of the current
pension value.
b) The social allowance paid to children from the beginning of their 7th
year of age until they complete the age of 14 to the amount of 70 per
cent of the standard benefit of a single, which was introduced by § 74
SGB II, does not comply the constitutional requirements already because
it is derived from this standard benefit, which had been incorrectly
ascertained. It is true that by introducing a third age group and by
using the determination that is based on § 74 SGB II, the legislature
will probably have come closer to realistically ascertaining the
necessary benefits for school-age children. In spite of this, it has,
however, not complied with the requirements placed on ascertaining the
child-specific need because the statutory provision continues to be
based on the expenditure of an adult single.
c) The provision of § 24a SGB II, which provides for a non-recurring
payment of € 100.00, does not fit into the need system of the SGB II
from a methodological perspective. Furthermore, the legislature did not
empirically ascertain the school-related need of a child when enacting §
24a SGB II. Obviously, the amount of €100 per school year was based on a
free estimate.
8. Furthermore, it is incompatible with Article 1.1 GG in conjunction
with Article 20.1 GG that the SGB II lacks a provision which provides
for a claim to receive benefits for securing a current special need
which is not non-recurring and which is irrefutably necessary to cover
the subsistence minimum that is in line with human dignity. Such a claim
is necessary for the need which is not covered by §§ 20 et seq. SGB II
for the sole reason that the sample survey on income and expenditure on
which the standard benefit is based only reflects the average need in
usual situations of need but not a special need arising due to atypical
need situations that goes beyond it.
It is in principle permissible to grant a standard benefit as a fixed
rate. If the statistical model is used in accordance with the
constitutional requirements and if in particular the lump sum has been
determined in such a way that it is possible to balance out the
different need items, the person in need of assistance will, as a
general rule, be able to organise his or her individual expenditure
behaviour in such a way as to manage with the fixed rate; in case of
special need, he or she will, above all, have to resort to the potential
for saving up that is contained in the standard benefit.
As, due to its concept, a lump-sum standard benefit amount can only
cover the average need, a need arising in special cases is not
convincingly reflected by the statistics. Article 1.1 GG in conjunction
with Article 20.1 GG requires, however, to cover also this irrefutable
current special need which is not non-recurring if this is necessary in
an individual case for a subsistence minimum that is in line with human
dignity This need has not as yet been covered without exception in the
SGB II. Due to this gap in the coverage of the vital subsistence
minimum, the legislature is to provide for a hardship arrangement in the
shape of a claim to assistance benefits to cover this special need for
those entitled to receive benefits pursuant to § 7 SGB II. However, this
claim only arises if the need is so considerable that the total amount
of the benefits granted to the person in need of assistance – including
benefits paid by third parties and taking into account the possibilities
of saving of the person in need of assistance – no longer ensures the
subsistence minimum that is in line with human dignity. In view of the
narrow and strict requirements placed on this constituent element, this
claim will probably be considered only in rare cases.
9. The unconstitutional provisions remain applicable until the
legislature enacts new provisions, which it is ordered to do until 31
December 2010. Due to the legislature’s scope for action, the Federal
Constitutional Court is not competent to determine a certain amount of
benefits on its own on the basis of its own assessments and evaluation.
As it cannot be established that the standard benefit amounts which are
fixed by statute are evidently insufficient, the legislature is not
directly obliged under the constitution to fix higher benefits. Instead,
it must, according to the instructions given, conduct a procedure to
ascertain the benefits necessary for securing a subsistence minimum that
is in line with human dignity which is realistic and takes account of
the actual need, and it has to anchor the result of such procedure in
the law as a claim to benefits.
Article 1.1 GG in conjunction with Article 20.1 GG does not oblige the
legislature to retroactively fixing the benefits anew. Should the
legislature, however, not have complied with its obligation to enact a
new provision until 31 December 2010, a law enacted, contrary to this
obligation, at a later date, would have to be declared applicable by 1
January 2011.
Apart from this, the legislature is obliged to create a provision in the
SGB II until 31 December 2010 at the latest which ensures that an
irrefutable current special need which is not non-recurring is covered.
Those entitled to receive benefits according to § 7 SGB II which have
such a need must however receive the necessary benefits in kind and cash
even before the new provision is enacted. To avoid the danger of a
violation of Article 1.1 GG in conjunction with Article 20.1 GG in the
transitional period until a corresponding hardship arrangement is
introduced, the unconstitutional gap must be closed for the time from
the pronouncement of the judgment onwards by an order of the Federal
Constitutional Court to this effect.
This press release is also available in the original german version.
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