Consequences of the new basic security: Don't save for the children

Patrick Schröder (name changed) has had a problem since August 18th. That day he received a message from the job center: his children are too rich. Both have around 6,000 euros in their accounts. The grandparents had saved the money for her, says the basic security recipient, for her driver's license and the like. Until then, no one had ever complained about that.

But now the office demanded that the children should first use around 1,000 euros from their savings for their living expenses. Until they have used up the sum, they are no longer part of his community of needs. With the decision, the authority reduced the monthly benefit that Schröder and his children received by 878 euros.

This corresponds to the standard rates and the share of housing costs for the children who live with him and his separated mother on a weekly alternating basis. The father himself continues to receive basic security, but he also has to cover the children's share of the rent from his standard rate. The family will only be paid 193.96 euros.

In the case of Patrick Schröder, this is the effect of the black-red coalition's citizen's benefit reform. Tightening of social benefits, which is now called basic security, came into force on July 1st. They are now gradually developing their effect in new performance notices.

The change in the law affects, among other things, the rules on protective assets. Previously, there was a flat-rate allowance: people received benefits under citizens' allowance even if they had assets of up to 15,000 euros. Schröder's children's savings accounts were therefore not a problem.

Now the limit is staggered by age. Anyone over 50 can now keep 20,000 euros. The coalition justified this with respect for the life's work of older people. However, she had less interest in the life chances of the younger people. Anyone under 30 now only has an allowance of 5,000 euros.

Not only the Schröders, but also several other families are likely to be affected by this tightening. Exactly how many there are is unknown. The Greens in the Bundestag asked the federal government about the number. In the answer available to the taz, the Ministry of Social Affairs writes that it has no data on this and does not intend to conduct a survey: “An expansion of the official statistics is not planned.”

Patrick Schröder was caught off guard by the job center decision in August. He did notice about the change in allowances. However, he relied on another regulation in the Basic Security Act that the traffic light government introduced in 2023 and which Black and Red left untouched in their reform. Paragraph 12 states that allowances that have not been exhausted can be transferred within the family.

Schröder himself has no assets at all apart from a private pension plan, which does not count for the job center. The children's excess money could easily be used to offset any unused allowance.

However, there has been a relevant sentence elsewhere in the law for several years. Paragraph 7 states that children only belong to the community of need and receive benefits if they cannot pay for their living expenses “from their own income or assets”.

What is now crucial is the order in which the authorities apply the two sentences when examining an application. If the Schröders' job center had only transferred the father's allowance to the children according to paragraph 12, paragraph 7 would no longer have played a role: their assets would not have been considered too high and they would not have been kicked out of the community of needs.

However, the Federal Employment Agency prescribes a different order to the job centers in an instruction: The office only had to check according to paragraph 7 whether the children have too much money. Since that was the case, they were thrown out of the community of needs before the allowances could be transferred according to paragraph 12. This regulation does not apply in the other direction: if Schröder's children had no assets at all, but he had too much, he could have easily used their allowances.

This practice is not new. Even before the black-red reform, the job centers were instructed to apply the law in this way. However, due to the reduced allowances for young people, this is now likely to play a role much more often than before.

Criticism of the regulation comes from Green MP Timon Dzienus. "As soon as a child has some savings, he or she falls out of basic security. This is cynical and increases the likelihood that a child will remain in poverty for the rest of their life," he says. Dzienus speaks of a “short circuit in the system” because children are not allowed to use their parents’ allowances. "The federal government is turning a legal protection rule into a trap. Friedrich Merz has once again gotten lost in the jungle of cuts and should quickly return to the path of humanity and reason."

Within the government, however, the SPD-led Ministry of Social Affairs sees no need for change. In its answer to the Greens' question, it justifies the regulation by saying that parents also have to pay for the living expenses of their destitute children before they receive basic security - but conversely, children do not have to pay for the living expenses of their destitute parents. “Consequently, the child’s income and assets remain entirely attributable to him,” the response states.

So nothing will change politically for the time being. And legally it is questionable whether there is anything to be gained for Patrick Schröder and his children. He is now taking legal action against the job center decision in two instances. Decisions on the main issue are still pending. However, the responsible state social court has already made it clear that it fundamentally shares the interpretation of the law by the government and authorities.

You could now say: Then the man just has to come to terms with it and let the children live on their excess savings for a while. In a few months they would also receive basic security again. But there is another problem: As a parent, Schröder is not the only one who has access to the children's savings accounts. The mother, who does not have basic security herself, would have to agree so that he can withdraw money. According to him, she refuses.

That's why Schröder's case is now still a concern of a state agency: after corresponding demands from the job center and the social court, he applied to the family court to be allowed to decide on the savings accounts alone.

The judges there have also already indicated a trend in a letter - and it could be that family law will end up contradicting social law. The letter states that, as a rule, parents are not allowed to take their children's money from their account to pay for everyday expenses for the child. An exception is only possible in an “absolute emergency”. Whether this applies to the specific case or not will be clarified next Friday: Then the family court will announce its decision.

Until then, Patrick Schröder doesn't know how his children and he will get through the month. For September, he says, he was able to borrow money from friends. By order of the state social court, his children received a loan from the job center for October. The transfer for November came from the office on Friday. This time, the office not only deducted the rent from its standard rate, but also a first installment to repay the debts from the previous month. Schröder now has 165.81 euros and vouchers for the food bank for himself and the children.