Federal Constitutional Court - Press office -

Press release no. 120/2010 of 20 December 2010

Order of 7 December 2010 – 1 BvR 2628/07 –

Elimination of unemployment assistance as of 1 January 2005
is constitutional


Unemployment assistance was a replacement for income provided by the 
state and financed through tax revenues upon unemployment which was paid 
by the Federal Employment Agency (Bundesagentur für Arbeit) on behalf of 
the Federation. Among others, a prerequisite for the grant of 
unemployment assistance was the need of the complainant. Its amount was 
not oriented toward the need of the recipient, but rather, toward his 
last salary earned; it was a certain percentage of a net standardised 
salary. Unemployment assistance was granted for periods of time. Prior 
to each renewed grant, all eligibility prerequisites for the claim were 
to be re-examined. Pursuant to § 428.1 sentence 1 and § 198 sentence 2 
no. 3 of the Third Book of the Code of Social Law (Drittes Buch 
Sozialgesetzbuch – SGB III) there was also a possibility for claiming 
unemployment assistance with relaxed prerequisites: those employees who 
were above the age of 58 and did not fulfil the legal prerequisites of 
the claim because they were not ready to work and did not use or did not 
want to use all means to end their unemployment situation also had a 
claim for unemployment assistance. This was the practice when an 
unemployed person made a corresponding declaration to the Federal 
Employment Agency. 

The rules regarding unemployment assistance were amended by the Fourth 
Act for Modern Services on the Labour Market (Viertes Gesetz für moderne 
Dienstleistungen am Arbeitsmarkt) of 24 December 2003 so that it could 
only be granted until 31 December 2004. The amendment became effective 
on 1 January 2004. In addition, unemployment assistance was completely 
deleted from the catalogue of employment promotion from 1 January 2005. 
Unemployment benefit II (Arbeitslosengeld II) paid according to the 
provisions of the Second Book of the Code of Social Law (Zweites Buch 
Sozialgesetzbuch – SGB II) – Basic Provision for Job-seekers – was put in 
its place, the calculation of which no longer related to the previous 
income of the persons in need of assistance, but rather, in general to 
their need. 

The complainant, who was born in 1946, received unemployment assistance. 
In June 2004 he submitted a declaration within the meaning of § 428.1 
sentence 1 SGB III and thereupon received unemployment assistance until 
the end of the year. His application for a grant of unemployment benefit 
II from January 2005 onward was rejected by the benefits provider on the 
grounds that the monthly income to be set off against the complainant’s 
and his wife’s total calculated need exceeded that need. The 
complainant’s lawsuit for continued payment of unemployment assistance 
was unsuccessful before the social courts. The complainant argues that 
the challenged decisions and the elimination of unemployment assistance 
violate his fundamental right to property; furthermore, he complains of 
an infringement of the constitutional principle of the protection of 
legitimate expectations. 

The First Senate of the Federal Constitutional Court rejected the 
constitutional complaint of the complainant, to the extent it was 
admissible, as unfounded. The elimination of unemployment assistance is 
compatible with the Basic Law. 

In essence, the decision is based on the following considerations: 

1. The elimination of unemployment assistance does not violate the 
complainant’s fundamental right to property (Article 14.1 of the Basic 
Law) because the statutory claim for unemployment assistance is not 
property within the meaning of this fundamental right. This also applies 
to the grant of unemployment assistance under the relaxed prerequisites 
of § 428.1 sentence 1 SGB III. Social law claims only enjoy the 
fundamental right of protection of property when the matter involves 
legal assets that serve to secure subsistence and relate to not 
insignificant personal contributions of the owner. 

The latter point does not relate to the statutory claim for unemployment 
assistance. There was no direct financial connection between the 
contributions to unemployment insurance and the expenses for 
unemployment assistance. The contributions income only served to finance 
unemployment benefits, but not unemployment assistance, which was always 
paid out of tax revenues on behalf of the Federation. Unemployment 
assistance from a financial legal point of view also was not conceived 
of as a unit financed by both contributions and taxes. The fundamental 
differences between unemployment benefits and unemployment assistance 
also exclude the assumption that both types of aid were combined into 
one uniform claim. While the unemployment benefits were a time-limited 
insurance payment, this was not the case for unemployment assistance, 
which was basically unlimited in duration, and which, unlike 
unemployment benefits, was only paid upon need, taking into account the 
recipient’s assets. Unemployment assistance was aid motivated by 
socio-political concerns that was paid without relation to the provision 
of contributions by the insured person and was not paid as a modified 
continuation of unemployment benefits. 

2. The elimination of unemployment assistance does not violate the 
principle of legitimate expectations because it did not develop any 
retroactive effect. The complainant also was not protected from a change 
in the legal situation based on any other reasons. 

Genuine retroactive effect (echte Rückwirkung), where a statute 
subsequently changes situations in the past that have already been 
concluded or that establishes its temporal application at a point in 
time prior to the promulgation of the statute, does not exist here. This 
is because both the deadline for new or renewed grants of unemployment 
assistance until 31 December 2004 as well as its elimination from 1 
January 2005 onward only affected future grants. 

Similarly, false retroactive effect (unechte Rückwirkung), which exists 
when a statute affects current, not yet concluded circumstances and 
legal relationships in the future and, thus, at the same time 
subsequently devalues the affected legal position, does not exist here. 
Unemployment assistance was only granted for a certain period of time 
and only upon a renewed examination of the prerequisites to a claim. A 
right that could have been protected by the principle of legitimate 
expectations against its subsequent devaluation, thus, arose at the 
earliest upon each period of new or renewed grant of unemployment 
assistance, and it only related to the time until the expiration of each 
grant period. 

The general reliance of a citizen on the continuation of a legal 
situation and, therefore, his expected future entitlement to benefits is 
not a legal position subject to constitutional law protection. 
Similarly, the submission of a declaration pursuant to § 428.1 sentence 
1 SGB III does not rise to the level of a disposition for the unemployed 
person that could form the basis of an expectation of continuation of a 
claim that is worthy of protection. Moreover, from the outset there was 
no basis for a legitimate expectation worthy of protection on the part 
of the complainant that unemployment assistance would be granted beyond 
31 December 2004 because the limitation of unemployment assistance until 
31 December and its elimination from 1 January 2005 had already been 
written into law before he made his declaration according to § 428.1 
sentence 1 SGB III. 


This press release is also available in the original german version.