Term and Definition: Budget, personal
Das personal budget refers, in the legal context, to a form of self-determination and individual participation for people with disabilities or special support needs. It is a benefit for participation in social life, in which a cash benefit is provided instead of benefits in kind or services. With this budget, eligible persons can independently purchase and manage the necessary support services.
The personal budget is legally regulated in Germany and represents an important instrument for strengthening individual responsibility and self-determination. Its legal basis is in particular the Ninth Book of the Social Code (SGB IX).
Legal bases
SGB IX – Rehabilitation and Participation of Disabled Persons
The legal provisions on the personal budget are laid down in SGB IX, in particular §§ 29 and 30 SGB IX. SGB IX forms the core of legal regulations on the rehabilitation and participation of people with disabilities, with the personal budget explicitly provided as a form of benefit.
Section 29 SGB IX
According to § 29 SGB IX, benefits for participation can be provided as a personal budget instead of benefits in kind. Eligible persons are thus those entitled to benefits who have an individual need and want to decide independently how and by whom their support is provided.
Section 30 SGB IX
§ 30 SGB IX defines the structure of the personal budget as a cash benefit or, in rarer cases, as a voucher system. The amount is based on the determined individual need and is based on the kind of support previously provided.
Other relevant legal sources
The personal budget is also anchored in other Social Codes (e.g., SGB XII – Social Assistance), in SGB XI (long-term care insurance), as well as in SGB V (statutory health insurance), provided that benefits can be granted in the form of a budget.
Eligibility Requirements
Providers and Eligible Persons
Persons entitled to a personal budget are people with disabilities as well as persons at risk of disability and those who rely on participation benefits. Entitlement depends on the applicable regulations of the respective social benefit providers, such as:
- Integration offices
- German pension insurance
- Accident insurance carriers
- Long-term care funds
- Social welfare offices
The budget can be claimed by eligible adults as well as minors. For minors, those with parental authority exercise the right to apply.
Application and Procedure
The personal budget is granted upon application. The application must be submitted to the responsible benefit provider, whereby the so-called Cross-provider Personal Budget may also bundle benefits from several providers. In the so-called budget meeting individual needs are determined and the specific implementation agreed. The decision on the application must be made within the statutory deadlines.
Legal Structure
Scope and Type of Grant
The personal budget is regularly paid out as a cash benefit. The amount is based on individual needs and generally corresponds to the value of the service or benefit previously granted in kind.
Exclusion and Special Features
A claim to a personal budget can be excluded if there are legal or practical reasons (e.g., significant risk to the beneficiary or major obstacles to implementation). The reasons must be documented and justified in an official notice in a comprehensible manner.
Legal Consequences and Obligations
The personal budget carries the obligation to use the benefits for the intended purpose, to meet individual support needs. Beneficiaries must provide evidence, such as receipts or contracts, to prove that the budget is used as intended. Misuse or improper use can lead to repayment and further legal consequences.
Quality Assurance
The use and effect of the personal budget are regularly reviewed. Depending on the provider, this may involve an annual or occasion-related review. Especially for larger amounts or complex support services, quality requirements apply to the delivery of services and documentation.
Legal Remedies and Right of Appeal
If the application for a personal budget is fully or partially rejected, the beneficiary has access to legal recourse. Initially, an objection can be lodged against the official decision. If the objection is dismissed, it is possible to bring an action before the Social Court in accordance with the provisions of the Social Court Act (SGG).
Differentiation from Other Types of Benefits
The personal budget differs from classic cash benefits, such as social assistance or basic security, due to its designated purpose. While regular cash benefits are intended to secure subsistence, the personal budget is granted exclusively for participation and support services that would otherwise be provided as services in kind.
Special Forms: Cross-provider Personal Budget
Das cross-provider personal budget can bundle benefits from different social service providers in a single cash payment, so that the beneficiary receives a single benefit even with complex support needs. This requires close cooperation between the various cost carriers and a coordinated support plan.
International Comparison
Similar models exist internationally, such as the Personal Health Budget in Great Britain or the Personal Budget in the Netherlands. In Germany, the personal budget has been a legally established option for individual participation since 2008.
Current Developments and Case Law
Current case law frequently addresses issues of needs assessment, determination of budget amount, quality assurance, and prevention of misuse. Courts regularly emphasize the principle of self-determination and the requirement for appropriate use of funds.
Summary
The personal budget is a legally established instrument for promoting self-determination and individual participation for people with disabilities or special support needs. It enables responsible use and management of services that were previously offered as benefits in kind or services. The legal framework is comprehensively regulated in SGB IX and other Social Codes. The personal budget is granted upon application, is designated for a specific purpose, and is subject to certain proof requirements. Rejections or requests for repayment can be reviewed through legal remedies. Due to its special structure, the personal budget contributes to greater self-determination in coping with everyday life.
Frequently Asked Questions
Can the personal budget be garnished?
According to § 29 SGB IX, the personal budget serves to ensure individual participation services for people with disabilities. Legally, the personal budget is therefore generally not subject to seizure, as it is designated to cover disability-related needs and is explicitly protected from garnishment under § 54(2) SGB I and, where applicable, § 851 ZPO. Seizure is only possible if the budget is used for purposes other than those intended or for unapproved services, thus voiding the special protection. Ultimately, the enforcement court can review the purpose of the funds on a case-by-case basis, so diligent recordkeeping and proof of use are mandatory.
Who is liable in the event of misuse of the personal budget?
The legal basis regarding liability for improper or incorrect use of funds is, in particular, § 29(6) SGB IX. In terms of budget and criminal law, the recipient is obliged to use the budget exclusively for the approved participation services and to provide proof. Deliberate or grossly negligent misuse, such as fraudulent use, can not only lead to recovery of funds by the funding agency (§ 50 SGB X), but also to civil and criminal consequences such as liability for damages (§ 823 BGB) or criminal offenses (e.g., fraud pursuant to § 263 StGB). In the case of an assistant, that person may also be held liable under certain circumstances if contributory negligence can be proven.
Must the personal budget be declared in the income tax return?
The personal budget is, as a designated social benefit under § 3 no. 11 EStG, tax-free and therefore does not fall under income tax liability. Nonetheless, the administrative regulations must be observed: The budget does not need to be reported as income in the tax return, even if it is used to finance personal assistance. However, if staff are employed with the budget (e.g., assistants), the received wage payments and the role as employer must be reported and documented accordingly for wage tax and social insurance purposes with the tax office and relevant authorities.
Which social benefits are affected by the personal budget?
The personal budget is paid independently of income and, according to § 29(3) SGB IX, is intended as a substitute for benefits in kind or services. It does not normally count towards other transfer payments, such as basic security under SGB XII or unemployment benefit II under SGB II, provided it is used exclusively for its intended purpose. However, if the funds are misused (e.g., for living expenses), it can be counted as income within the meaning of the relevant Social Codes (§ 11 SGB II, § 82 SGB XII). Legally, a clear separation of the budget from other income is therefore required.
What happens to the personal budget during inpatient stays?
The legal situation is set out in § 29(5) SGB IX. During a fully inpatient stay in a facility, there is generally no entitlement to the personal budget if the needs are covered by the inpatient service. However, if services are required that go beyond what is provided by the facility and are not covered by it, continuing payment is exceptionally possible. The distinction must be made on a case-by-case basis and requires a thorough individual assessment, taking into account the relevant notices of benefit and the actual needs.
What documentation requirements apply when receiving the personal budget?
According to § 29(4) SGB IX, the budget holder is obliged to prove the designated use of the personal budget. In practice, funding providers require the submission of invoices, receipts, or comparable proof of the services used. The legal consequences in case of violation are recovery of funds (§ 50 SGB X) and, where applicable, suspension of further budget approval. Legally prescribed deadlines for documentation differ and are regularly specified in the approval notice and in budgetary guidelines; as a rule, the documentation requirement lasts at least four years.
How does the process work in the event of repayment of the personal budget?
If repayment is demanded by the funding agency, the procedure is regulated in §§ 45 ff. SGB X. The responsible agency issues a written decision in which the repayment is justified. The budget holder is entitled to a legal hearing (§ 24 SGB X) and may file an objection within one month. In further proceedings, judicial review by the Social Court may follow. The obligation to repay extends to amounts used unlawfully or not accounted for. In cases of deliberate misuse, the agency can also initiate criminal proceedings and demand interest on the amount to be recovered (§ 50(2) SGB X).
