Concept and Fundamentals of Income Attribution
Die Income Attribution refers in the German legal system to the consideration of the income of one or more persons when granting or calculating social benefits, maintenance claims, or other state or civil law claims. The aim is to determine the need or ability to pay of the person concerned and to adjust or modify claims accordingly. Income attribution is of central importance in social law, family law, and other areas of law.
Legal Framework of Income Attribution
General Statutory Principles
Income attribution is primarily governed by various laws, with their design and areas of application differing significantly. The key statutory foundations include, among others:
- Social Code (SGB): in particular the Second Book of the Social Code (SGB II – Basic Security for Jobseekers), the Twelfth Book of the Social Code (SGB XII – Social Assistance), as well as the Third Book of the Social Code (SGB III – Employment Promotion).
- Federal Child Benefit Act (BKGG): regarding child benefit.
- Federal Parental Allowance and Parental Leave Act (BEEG): pertaining to parental allowance.
- Civil Code (BGB): especially with regard to maintenance law and the calculation of maintenance claims.
- Maintenance Advance Act (UVG): for the provision of maintenance advance.
The specific structure of income attribution varies depending on the field of law and type of benefit.
Income Attribution in Social Law
In the context of social law, income attribution is primarily used to determine need and ensure that social benefits are only granted in the case of proven need. Key provisions include, among others:
SGB II – Basic Security for Jobseekers
Sections 11 et seq. SGB II set out which types of income are taken into account for unemployment benefit II (ALG II) and social benefit. All receipts in cash or in kind are to be considered as income, unless exceptions are provided by law. Income from employment, maintenance payments, pensions, capital gains, and other regular or one-time receipts are included in the definition of income. Certain types of income, such as child benefit, may be credited in a different manner.
Special rules relate to allowances (§ 11b SGB II) and the deduction of certain expenses (for example, work-related expenses).
SGB XII – Social Assistance
Similar to the provisions in SGB II, SGB XII in Sections 82 et seq. regulates the attribution of income for social assistance. The rules are similar in content, but there are differences in the allowances and the consideration of special types of income.
Housing Benefit Law
The Housing Benefit Act (WoGG) regulates income attribution in Section 13 et seq. Here, the total household income and deductible amounts play a role.
Income Attribution in Family Law
Im Maintenance Law According to Sections 1601 et seq. BGB, the income of the liable party and the beneficiary is used to determine the maintenance claim. All income, including benefits in kind or income from secondary employment, is added to total income, with certain deductions and allowances also being considered.
The Düsseldorf table and the guidelines of the higher regional courts provide practical guidance and consider income attribution in detail.
Other Areas of Income Attribution
Income attribution also plays a decisive role in pension law (e.g., for widows’ or widowers’ pensions according to Section 97 SGB VI) as well as in the organization of state subsidies and benefits, such as parental allowance.
Principles and Methods of Income Attribution
Definition of Income
The definition of income varies by legal area. Common to all provisions, however, is that both regular and one-off income can be included. This includes, for example:
- Income from employment (employed or self-employed)
- Income from renting and leasing
- Capital gains
- Benefits under other social laws (e.g., ALG I)
- Maintenance payments
Depending on the regulation, there are specific exceptions for certain types of income (e.g., compensation for pain and suffering, certain allowances, or scholarships).
Allowances and Deductions
A key element of income attribution is the consideration of allowances and deductions. These are intended to create incentives to work and to ensure that certain necessary expenses or a minimum livelihood are protected. Examples of deductible amounts include:
- Flat-rate work-related expense deduction
- Allowance for single parents
- Contributions for private pension schemes
- Contributions to health, nursing care, and pension insurance
The amount and type of allowances are specifically prescribed by law and vary according to the type of benefit and life circumstances.
Benefit Communities and Household Communities
In the field of basic social security and social assistance, it is also necessary to check whether a benefit community or household community exists within the meaning of the law. In this case, the income of all members of a benefit community is taken into account when calculating the total claim.
Impacts and Legal Protection
Income attribution has extensive effects on the amount and entitlement to social benefits or maintenance payments. Incorrect or incomplete disclosure of income can lead to claims for repayments, benefit reductions, or sanctions.
Procedural Aspects
Affected individuals are, especially in social law, entitled to an administrative procedure according to the Social Code, including the right to be heard, inspection of files, and judicial protection in administrative courts in the event of disputes regarding income attribution.
Repayment and Sanctions
If a review shows that income was not declared correctly or an attribution was unjustifiably omitted, benefits may be reclaimed. In addition, sanctions, monetary fines, or penalties may be imposed if applicable.
Significance in Practice and Current Developments
Income attribution is a central assessment criterion for ensuring that social benefits and maintenance are granted according to need. Due to social and economic changes, it is regularly in flux, for example in the course of reforms to state transfers or the expansion of digital verification and control mechanisms.
Current developments relate among others to the digitalization of administrative procedures, the intensification of data matching, as well as the adjustment of allowances in the course of legislative reforms.
Summary
Income attribution is a complex and fundamental instrument of German social, family and maintenance law. Its precise arrangement depends on the respective legal basis and is subject to a multitude of special rules, exceptions, and peculiarities. Proper application of income attribution is essential for the just and lawful distribution of state benefits as well as the determination of civil law claims. Ongoing adaptations of statutory provisions ensure that income attribution corresponds to current life and employment realities and fulfills social policy goals.
Frequently Asked Questions
Is my income always fully credited when calculating social benefits?
As a rule, when calculating social benefits such as unemployment benefit II (citizen’s benefit), housing benefit, or child supplement, all earned income is taken into account. However, it is necessary to differentiate which types of income are actually credited: Not all types of income are fully subject to attribution. For example, there are tax-free receipts, certain one-off grants, or legally stipulated allowances that are wholly or partially exempt from attribution. Work-related expenses, flat-rate deductions, and other deductibles may also be subtracted from gross income before the income subject to attribution is determined. The time the income is received is also relevant: Usually, the timing principle applies, meaning income is credited in the month in which it is actually received by the beneficiary. Special rules apply to self-employment, where a forecast of annual income can be prepared. In any case, it should be examined which allowances and attribution modalities apply to the individual case to reliably assess how much income is actually credited to a social benefit.
What allowances exist for income attribution?
There are various allowances, some of which are stipulated by law and vary according to the type of benefit. In Bürgergeld (formerly unemployment benefit II), for example, there are basic allowances for earned income: 100 euros per month of income from employment remain generally exempt from attribution. In addition, there are percentage allowances for further portions of income up to certain limits. For example, 20 percent of the next 520 euros are to be considered as an allowance. In addition to this graduated system, there are further allowances, for example for minors, income from training, or voluntary work. Specific allowances may also apply to maintenance payments, pension income, or insurance deductions. The exact amount of allowances and their applicability can be found in the respective special law (SGB II, SGB XII, Housing Benefit Act, etc.), and an individual calculation must always be made.
How is income from self-employment attributed?
For income from self-employment, as opposed to employees, a forecast of the expected annual income is prepared. The authorities will generally make a provisional estimate of the income based on invoices, statements, and estimated business expenses. At the end of the approval period, what is known as the final assessment takes place, during which the actual income earned is reviewed based on tax assessments and final statements. Operating expenses can be deducted either through the expense allowance or through specific evidence. The usual allowances also apply here. If there are discrepancies in the final calculation, this may result in either a demand for repayment to the authority or a supplementary payment to the beneficiary.
Is my partner’s or my children’s income taken into account?
Within the benefit community under SGB II, not only your own income, but also that of partners (spouses, civil partners) and, where applicable, of children is correspondingly considered. The income of persons belonging to the benefit community is prorated to the total need, with corresponding allowances and deductions also being taken into account for these persons. For unmarried or non-related cohabitants (e.g., in shared apartments), other rules apply, as they do not usually form a benefit community unless what is known as a responsibility and commitment community exists, which must be checked separately.
What evidence does the authority require for income attribution?
To ensure legally secure income attribution, the relevant authorities require extensive evidence. This includes income certificates, payslips or wage slips, account statements, tax assessments (especially for self-employed persons), documentation of maintenance payments received, pension award letters, proof of secondary income, rental agreements in the case of income from letting, as well as contracts relating to capital gains or interest, if applicable. The obligation to provide evidence lies mainly with the applicant. The authority checks the plausibility and authenticity of the documents and may deny or provisionally grant benefits if evidence is missing or incomplete. In case of doubt, an affidavit may also be required.
When is income considered received and when is it credited?
In the context of income attribution, the so-called inflow principle usually applies (§ 11 (2) SGB II): Income is credited in the month in which it is actually available to the beneficiary, i.e., credited to their account or paid out in cash. Exceptions exist, for example, for one-off receipts, which may be spread over several months. Retroactive income increases (e.g., due to back payments) are also handled according to the inflow principle. This can have relevant effects on the calculation of the respective benefit in the specific attribution month.
What are the consequences of incorrect or omitted disclosure of income in applications?
Anyone who conceals income, reports it too low, or makes false statements in social benefit applications risks both criminal and civil law consequences. This may lead to the recovery of unduly received benefits (overpayment), interest charged on repayments, fines for administrative offenses, or even prosecution for fraud (§ 263 StGB). Furthermore, the authority may refuse benefits in whole or in part for the future (§ 66 SGB I). Therefore, there is a duty to notify the authorities of all relevant changes in income; every change in income must be reported to the authority without delay to avoid legal disadvantages.
