Inheriting property as a welfare recipient

If you receive unemployment benefit II (ALG II) or Hartz IV and inherit a property, there are a few things to bear in mind. This is because the Jobcenter does not make it easy for financially needy heirs.

Anyone who has too few financial resources to make a living is generally subject to many conditions imposed by the Jobcenter. It is no different if the person inherits. The inheritance must not be concealed from the office. Otherwise there is a risk of penalties and sanctions.

Inheritance as income vs. inheritance as assets

As a rule, the inheritance is considered Income. Before August 1, 2016, real estate also counted as income. The amendment to the German Social Code means that real estate now also counts as assets. Income is fully attributed to ALG II credited. Before the change in the law (§ 11 para. 1 SGB II) In 2016, this often meant that Hartz IV recipients were forced to sell an inherited property in order to make ends meet. This is because ALG II payments were also stopped with the inheritance. But only if the property was inherited while receiving social assistance.

In contrast to income Assets not completely on the Harzt IV rate is taken into account. In addition, under certain circumstances, real estate is part of the protected assets that may not be touched by the Jobcenter. However, this is only the case if the ALG II recipient lives in the property themselves and the estate is of an appropriate size. If this is the case, the Jobcenter will even cover some of the costs of home ownership. For example, property taxes or operating costs that can be apportioned. The social welfare recipient is also entitled to Allowances of 150 euros for each completed year of life. Anyone born before 1948 even has a basic allowance of 520 euros.

If the inherited property is not appropriate

The Jobcenter decides whether the property is appropriate based on living space and the number of occupants. 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 the application for unemployment benefit may also be taken into account.

If a property is deemed inappropriate, the Jobcenter's first request is to sell all or part of the property. This turns the property into a realizable asset. Under certain circumstances, however, the property can also be divided. If the sale is demonstrably not sensible, for example for economic reasons, or the ALG II recipient is not prepared to do so, an agreement can also be reached on (partial) letting. The regular rental income is offset against ALG II.

If a sale is unavoidable, it helps to have an experienced estate agent at your side who knows the real estate market in the region very well and can achieve a sale price in line with the market.

Renouncing an inheritance with consequences

Anyone who wants to avoid stress with the Jobcenter and thinks that renouncing the inheritance will solve the problem is wrong. Because only if the inheritance consists entirely or predominantly of debts can the Jobcenter not accuse the ALG II recipient of having deliberately or negligently caused the necessary benefit receipt, which leads to compensation payments in accordance with § 34 Para. 1 SGB II.

Have you inherited a property 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 is used in this text. Female and other gender identities are explicitly included where 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 individual case.

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