COVID hardship allowance remains non-attachable when paid voluntarily

Arbeitsrecht-Anwalt-Rechtsanwalt-Kanzlei-MTR Legal Rechtsanwälte
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Arbeitsrecht-Anwalt-Rechtsanwalt-Kanzlei-MTR Legal Rechtsanwälte

Classification of the decision

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A hardship allowance voluntarily granted in connection with the COVID-19 pandemic may fall under protection from attachment and is then beyond creditors’ reach. The decisive factor is whether the payment is an allowance with a compensatory character for special burdens caused by the pandemic. In a corresponding case, the Federal Labour Court (BAG) had to rule on the attachability of such a benefit (see the coverage on Juraforum, source: https://www.juraforum.de/news/freiwillig-gezahlte-corona-erschwerniszulage-ist-nicht-pfaendbar_258294).
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Protection from attachment in wages: legal framework

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Earnings from employment are, in principle, subject to attachment

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Claims to wages and salary are generally among the attachable claims. They can be attached in the course of enforcement measures, with garnishment exemption limits and protective mechanisms to be observed.
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Exceptions: non-attachable payments

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However, the law provides for certain remuneration components that are exempt from attachment. This includes, in particular, benefits that are granted not as a regular wage component but as compensation for special hardships or burdens. Whether a payment falls into this category depends on its purpose and its design.
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Voluntary COVID hardship allowance: the purpose of the payment is decisive

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Distinction from regular wage components

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The key question for attachability is whether the hardship allowance is to be regarded as consideration for normal work performance or whether it primarily aims to compensate for extraordinary circumstances. In the case of a COVID allowance, the focus is typically on compensating for special burdens that could arise from additional risks, increased organizational requirements, or special working conditions during the pandemic.
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Nature as a hardship or compensatory payment

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According to the BAG’s decision, a voluntarily paid COVID hardship allowance may be classified as a non-attachable payment if, by its purpose, it compensates for a hardship and does not essentially constitute an increase in regular wages. Thus, it is less the label of the benefit and more its functional classification that matters.
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Significance for enforcement and enforcement practice

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Effects on attachment and transfer orders

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If a payment is classified as non-attachable, it cannot validly be the subject of an attachment. This particularly affects constellations in which employers grant individual allowances in addition to ongoing remuneration and third-party debtors are to be required to remit amounts within the framework of a wage garnishment.
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Relevance for the classification of voluntary special payments

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The decision makes clear that voluntary special payments must not automatically be treated as attachable wages. The decisive factor remains the specific purpose of the benefit and its actual design in the respective employment relationship.
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Concluding remark

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The distinction between attachable earnings from employment and protected allowances can play a significant role, especially in the case of special payments in the context of extraordinary events, for example when enforcement measures, payment claims, and the allocation of individual remuneration components coincide. Where there is a need for clarification in an insolvency-law context, professional support may be advisable; information on legal advice in insolvency law by MTR Legal attorneys can be found at the link provided.