Basic Income Support; Applying for a Loan in Certain Acute Emergency Situations

If you receive basic income support, you will be paid a lump-sum amount. This is the budget for what is known as the “standard allowance.” You must use this budget to cover both your ongoing—that is, regularly recurring—expenses and any irregular costs for necessary needs.

The standard needs allowance specifically covers expenses for:

• Food
• Clothing
• Personal hygiene
• Household goods
• Household energy, excluding the portions attributable to heating and hot water production
• personal needs of daily life, including participation in social and cultural life

If, due to special circumstances, your budget is temporarily insufficient to cover your daily needs, the Job Center may, upon request, grant you an interest-free loan to cover these essential needs.

An unavoidable need exists

• if it cannot be postponed, as this would otherwise lead to an acute emergency, and
• it cannot be expected that you will be able to cover this need with your next basic income support payments.

Examples include:

• necessary repairs
• necessary purchases, such as new winter clothing for growing children
• an impending disconnection of the electricity supply, for example, household electricity due to so-called “new debts.” These are debts that arose while you were receiving basic income support. A loan is possible if you cannot prevent the power disconnection in any other way, such as by making installment payments to the utility company.
• Theft or loss
• Fire in your apartment or house

You must apply for the loan separately and, as a general rule, provide proof of the undeniable need. If you have assets, you must first use them to finance the expenses. Depending on the circumstances, the Jobcenter may also instruct its field staff to assess the need.

The Job Center may also decide to provide you with benefits in kind instead of cash. In that case, the loan amount will correspond to the value of the necessary expense—that is, the purchase price.

You must use the loan for the specified purpose. The Jobcenter may require proof of this, such as a receipt.

You must repay the loan. Repayment begins the month following the disbursement of the loan. If you continue to receive basic income support, the loan will be deducted monthly from your benefit entitlement. As a rule, you will then receive 5 percent less of your applicable standard benefit amount until the loan is repaid. You will receive a written explanation of how the loan will be deducted in your specific case.

In order to receive the loan from the Jobcenter, you must prove that:

• you have an urgent, one-time need that falls under the category of everyday necessities that are normally covered by the standard benefit,
• you cannot meet this need through the benefit intended for this purpose—that is, the basic income support—and you have no assets,
• you have no other way to meet this need—for example, through secondhand stores or clothing banks
• the need is undeniable. This applies if
  • you cannot postpone it and
  • you cannot cover the need with your next benefits intended to meet your standard needs.

To receive the loan, you must apply for it at your Jobcenter. You can also do this online using the digital application for basic income support.

• If possible, contact your case worker at the Jobcenter.
• Submit an application. You can obtain any required forms from your local Jobcenter. You may also submit an informal application.
• Submit your application along with all supporting documents to your Job Center.
• The Job Center will review your application and supporting documents.
• You will receive a notice from the Job Center informing you whether your application has been approved or denied.
• Generally, the loan amount will be transferred to your bank account. However, this is usually different in cases such as electricity bill arrears where there is a risk of service disconnection. In such cases, the loan amount is transferred directly to your utility provider.

There is no application deadline.

• Required document(s)
  
  • Evidence that an undeniable need exists and the amount of that need, for example:
    • Theft report
    • Cost estimate or work order for repairs
    • Current bank statements