Inheriting property as a welfare recipient

Inheritance as income vs. inheritance as assets

As a rule, inheritance is considered income. Before August 1, 2016, real estate was also counted as income. The amendment to the Social Security Code meant that real estate is now also considered assets. Income is credited in full to ALG II. Before the change in the law (Section 11 (1) SGB II) in 2016, this often meant that Hartz IV recipients were forced to sell inherited real estate in order to be able to cover their living expenses. This is because ALG II payments were also stopped when the inheritance was received. However, this only applied if the property was inherited while the recipient was receiving social assistance.

Unlike income , assets are not fully counted toward the Hartz IV rate. In addition, under certain circumstances, real estate is considered exempt property that cannot be touched by the job center. However, this is only the case if the ALG II recipient lives in the property themselves and the estate has a reasonable amount of living space. If this is the case, the job center even covers some of the costs associated with home ownership. For example, property taxes or operating costs that can be apportioned. In addition, social assistance recipients are entitled to allowances of €150 for each year of age. Those born before 1948 even have a basic allowance of €520.

If the inherited property is not suitable

The job center decides whether the property is adequate based on the living space and the number of people living in the house. If a house with land is part of the estate, the land area is also taken into account. Different values apply for urban and rural areas. However, the living circumstances at the time of applying for unemployment benefits may also be taken into account under certain circumstances.

If a property is deemed inappropriate, the job center will first request that it be sold in whole or in part. This makes the property a realizable asset. Under certain circumstances, however, the property may also be divided. If the sale is demonstrably not feasible, for example for reasons of economic viability or because the ALG II recipient is not willing to do so, a (partial) rental agreement may also be agreed upon. The regular rental income is credited against ALG II.

If a sale is unavoidable, it is helpful to have an experienced real estate agent who knows the local property market very well and can achieve a sale price in line with market conditions.

Disclaiming an inheritance with consequences

Anyone who wants to avoid stress with the job center and thinks that renouncing an inheritance will solve the problem is mistaken. This is because only if the inheritance consists entirely or predominantly of debts can the office accuse the ALG II recipient of intentionally or negligently causing the necessary benefit payments, which leads to replacement payments in accordance with § 34 (1) SGB II.

Have you inherited real estate and need professional assistance with the sale or advice? Then contact us! We will be happy to help you.

 

Notes

For reasons of better readability, the generic masculine form is used in this text. Female and other gender identities are expressly included insofar as this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific case.

 

 

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