Bundessozialgericht

Selected Decisions

Basic security benefits for job-seekers

Judgment of 23 June 2016 - B 14 AS 30/15 R

Individually specified personal efforts on the part of the eligible beneficiary within the scope of an integration agreement are, in view of the prohibition of coupling, only appropriate under the law applicable to public contracts if support for such measures in the form of benefits from the Jobcenter is specifically and bindingly defined in the integration agreement.

The plaintiff and the defendant Jobcenter concluded an integration agreement pursuant to section 15 Volume Two of the Social Insurance Code - Basic support for job seekers (SGB II). This agreement specified the plaintiff’s job application efforts, however it did not include any provisions regarding the assumption of job application costs by the defendant. The defendant found multiple infringements of the plaintiff’s obligations based on a failure to satisfy his job application efforts and completely suspended his claim to unemployment benefits II (ALG II) for a period of three months (“100% sanction”; sections 31 set seq. SGB II).

The Social Court (Sozialgericht - “SG”) set aside the notices concerned, finding that there had been no violation of an obligation because the integration agreement was invalid as it did not provide a provision governing the assumption of job application costs. The Regional Social Court (Landessozialgericht - “LSG”) rejected the defendant’s appeal finding that provision governing job application efforts are void in an integration agreement that does not include a provision governing the assumption of job application costs. The Federal Social Court (Bundessozialgericht - “BSG”) denied the defendant’s appeal. The sanction notice challenged by the plaintiff is void because the plaintiff was not obligated to make efforts to apply for work as a result of the integration agreement. As a contract under public law this was entirely void by virtue of the so-called prohibition of coupling under sections 58, 55 Volume Ten of the Social Insurance Code - Social welfare administrative procedure and social welfare data protection (“SGB X”) because the personal obligation to apply for jobs did not include any specific and binding specification of support in the form of benefits from the defendant, namely the assumption of job application costs.

Judgment of 20 January 2016 - B 14 AS 35/15 R

Only a right of residence pursuant to the “Act on the residence, employment and integration of foreign nationals in the territory of the Federal Republic of Germany”, which provides for long-term perspectives, justifies an exception to the preclusion of benefits in Volume Two of the Social Code for foreign nationals from member states of the European Union.

The plaintiffs - a mother and her twins born during the time to which the dispute relates - are EU citizens. A process initiated by the Foreigners’ Registration Office to determine the loss of the right of residence and entry was not pursued any further once the plaintiff had described her circumstances. The defendant Jobcenter denied her application for a subsistence allowance pursuant to Volume Two of the Social Insurance Code - Basic support for job seekers (SGB II, Unemployment Benefits II) on the grounds that the plaintiff and her children were precluded from receiving benefits by virtue of section 7 subsection (1) second sentence SGB II.

The Social Court (Sozialgericht - “SG”) ordered the defendant to provide benefits under SGB II and the Regional Social Court (Landessozialgericht - “LSG”) denied its appeal. The preclusion from benefits was not applicable to the plaintiff. On appeal by the defendant, the Federal Social Court (Bundessozialgericht - “BSG”) suspended the ruling against the defendant and dismissed the complaint lodged against it because the preclusion from benefits applied to the plaintiffs. It found that they could neither rely on a material right of the free movement of persons under the Freedom of Movement Law/EU that was not included within the scope of the preclusion from benefits nor a right of residence under the Residence Act that could justify an exception to the preclusion from benefits. However, the plaintiffs were to be granted benefits pursuant to Volume XII of the Social Code (SGB XII) by the welfare authorities who intervened in the appellate proceedings. In this case, the systemic boundary between SGB II and SGB XII does not preclude the applicability of SGB XII. Within the scope of social welfare assistance for foreign nationals (section 23 SGB XII), the plaintiffs first have a right to a decision regarding their request for benefits that is free of abuse of discretion. After six months of actual residence in Germany, their benefits are to be reduced to zero pursuant to SGB XII within the scope of a discretionary reduction under consideration of the constitutional law-related requirements.

Judgment of 29 April 2015 - B 14 AS 29/14 R

1. An administrative act establishing the infringement of an obligation and a reduction in Volume Two of the Social Insurance Code - Basic support for job seekers (SGB II) may, in any event, be challenged separately if the ruling does not also provide for the implementation of the findings.
2. There are no substantial constitutional concerns barring a reduction in the entitlement to unemployment benefits II by thirty percent of the relevant standard support amount due to the infringement of an obligation.

The plaintiff received unemployment benefits II (“ALG II”) from the defendant Jobcenter since 2009. The defendant invited her to a meeting at the defendant’s offices on 24 October 2011 to discuss her employment situation. After the plaintiff failed to appear at the meeting, the defendant determined that she had failed to report and reduced her ALG II by 10% of the standard support amount (sections 31a et seq. SGB II). Additional invitations were sent for meetings on 4 November, 11 November, 21 November, 25 November, 7 December and 12 December 2011. The plaintiff did not comply with the invitations each of which resulting in a finding of a failure to report and an additional reduction in ALG II.

The plaintiff lodged complaints against all of the notices of action. Some of the complaints were successful before the Social Court (Sozialgericht - “SG”), however the Regional Social Court (Landessozialgericht - “LSG”) dismissed all of the complaints. The plaintiff’s appeal was successful in part. She correctly lodged an action for annulment on a separate basis against the so-called “sanction notices”. Legal grounds were lacking to challenge the first three notices of action, however this was not the case for the next four because a request to report lies within the discretion of the defendant and there were no grounds for the exercise of such discretion in the case of the subsequent identical requests to report. To the extent that the lawful notices of action set reductions that, in some months, cumulatively reached 30% of the relevant standard support amount, the Senate was not able to be sufficiently convinced of the unconstitutionality of the applicable regulations.

Employment promotion

Judgement of 12 December 2017 - B 11 AL 21/16 R

1. Residence abroad (including close to a border) is an obstacle to a claim to unemployment benefits if, during employment in Germany for which contributions were due, residence has been transferred abroad and a claim to unemployment benefit exists in the other EU Member State under coordinating European social law.
2. This entitlement to benefits existing in the other EU member state excludes a teleological interpretation of section 30 German Social Code (SGB) I on the scope of application of the Social Code with the waiver of a domicile or habitual residence in Germany

The dispute involved unemployment benefits from the German unemployment insurance scheme for the period from 1.2. to 4.8.2014.

The plaintiff, who had been employed in N. in Germany subject to compulsory insurance since 2001, moved to Switzerland in June 2012. Approximately one and a half years later, she terminated her employment in Germany through a termination agreement with payment of a severance payment as of 31 December 2013. The unemployment insurance fund of the Canton of Bern in Switzerland did not provide the plaintiff with “unemployment compensation” until 12 September 2014 and refused benefits from the Swiss unemployment insurance fund for the preceding period in light of benefits from the former employer.

The plaintiff had already registered as unemployed in Germany with the defendant Federal Employment Agency and applied for unemployment benefits. The defendant rejected unemployment benefits from the German unemployment insurance fund on the ground that the applicant was not resident in Germany.

The first legal action and appeal were unsuccessful. The Federal Social Court dismissed the plaintiff’s appeal. A claim to unemployment benefits cannot be based directly on the provisions of the Third Book of the Social Code - Promotion of Employment (SGB III), because section 30 (1) of the Social Code - General Part - (SGB I), which applies to all parts of the Social Code, restricts the scope of application of the entire Social Code to persons who have their place of residence or habitual abode within the territorial scope of the SGB I, i.e. in Germany. The plaintiff is not such a person because, during the period in question, she had both her domicile and habitual residence in Switzerland.

Nor does the reservation in favour of supranational and intergovernmental law in section 30 (2) SGB I give rise to any claim to unemployment benefits under German law. The plaintiff cannot derive any right to unemployment benefits under German law from the provisions of EC Regulation (EC) No 883/2004, which apply here because of the agreements between the European Union and Switzerland. As a “genuine” frontier worker within the meaning of Article 1(f) of Regulation (EC) No 883/2004, they receive unemployment benefits in accordance with Article 65 of Regulation (EC) No 883/2004 exclusively under the legislation of the Member State of residence. The Court of Justice of the European Communities (ECJ) has already ruled in its judgement of 11 April 2013 (C-443/11 <Jeltes>) that the amended version of Regulation (EC) No 883/2004 is no longer to be interpreted in the sense of the Miethe judgement of the ECJ (judgement of 12 June 1986 /C-1/85 <Miethe>) with a right for the genuine frontier worker to choose between benefits from the State of residence and those from the State of employment. Since the plaintiff had been resident in Switzerland since May 2013 at the latest and at the same time could claim benefits from the Swiss unemployment insurance, this - regardless of the differences in unemployment benefits under both legal systems - entails a change in applicable law in favour of Swiss law.

The exclusion from the German unemployment insurance scheme does not give rise to any serious constitutional objections in this specific case. With regard to Article 3 (1) of the Basic Law for the Federal Republic of Germany, the exclusion of benefits does not conflict with the Chamber decision of the Federal Constitutional Court of 30 December 1999 (1 BvR 809/95), according to which the legislature is not permitted to change the connecting factor between the levying of contributions and the entitlement to benefits without substantial objective reasons. That decision, with a restrictive interpretation of section 30 (1) SGB I, took account of a different starting position, because the plaintiffs there could not have received any unemployment benefits without a constitutional interpretation of section 30 (1) SGB I. They were not included in the scope of protection of European coordination law with claims deriving from it. On the other hand, under the agreements between the European Union and Switzerland, the plaintiff could claim unemployment benefits in her State of residence in accordance with Swiss law.

Judgment of 09 June 2017 - B 11 AL 14/16 R

Right to repeated payment of insolvency benefits (“InsG”) from the Federal Employment Agency upon discontinuation of self-employment during pending insolvency proceedings.

The plaintiff was employed by the owner of a nursing service (hereinafter the “employer”) as a housekeeper starting in October 2010. Insolvency proceedings were opened with regard to his assets on the basis of an inability to pay by order of the Local Court (Amtsgericht - “AG”) Essen on 1 November 2011. The defendant Federal Employment Agency approved insolvency benefits for the plaintiff to cover outstanding wages for the months of September/October 2011.
During the insolvency proceedings, the insolvency administrator released the employer’s self-employment activity from the insolvency restraint pursuant to section 35 subsection (2) Insolvency Code (Insolvenzordnung - “InsO”). Thereafter, the employer continued to operate the nursing service on a reduced scale.

New insolvency proceedings due to an inability to pay that related to the activity that had been released during the first insolvency proceedings, were initiated by order of the AG Essen on 1 August 2012. The defendant Federal Employment Agency denied the additional application for approval of insolvency benefits dated 7 August 2012 in which the continuously-employed plaintiff had asserted that wages for the months of June/July 2012 were still outstanding. Protest, complaint and appeal were all without success.

The Federal Social Court (Bundessozialgericht - “BSG”) denied the plaintiff’s appeal. Pursuant to section 165 subsection (1) first sentence number 1 Third Volume of the Social Insurance Code - Employment promotion (SGB III), employees have right to insolvency benefits if they were employed domestically and had outstanding claims to wages for the preceding three months of the employment relationship following an insolvency event. Among other things, an insolvency event includes the initiating of insolvency proceedings in relation to the assets of the employer.

It is the case that insolvency proceedings were initiated again with regard to the employer’s assets by order of the AG Essen dated 1 August 2012 so that additional insolvency proceedings within the meaning of the InsO were pending. However, this did not result in a (new) employment promotion-relevant insolvency event within the meaning of the social welfare provisions of section 165 subsection (1) first sentence number 1 SGB III. The earlier insolvency event, i.e. the initiation of insolvency proceedings with regard to the assets of the same employer on 1 November 2011 triggers a bar for employment promotional purposes in relation to the occurrence of an additional insolvency event due the continuing inability to pay on the part of the employer. For purposes of assuming the recovery of the ability to pay, it is not sufficient for the employer to continue his business activities and satisfy current obligations. In point of fact, the continued inability to pay should be presumed for as long as the debtor is not able to satisfy his outstanding debts in general due to lack of funds that is more than temporary. With regard to continuing inability to pay, the Regional Social Court (Landessozialgericht - “LSG”) - binding on the Senate - found (section 163 Social Courts Act (Sozialgerichtsgesetz - “SGG”) that the debtor never regained the ability to pay outstanding debts in general prior to the initiation of the second insolvency proceedings.

The scenario presented here, that of a second insolvency proceedings after the release of assets related to the self-employment activity within the scope of the first insolvency proceedings, does not justify a waiver of the requirement for the actual elimination of the inability to pay on the part of the employer. It is true that the insolvency administrator finally and unconditionally waives his powers of administration and disposition under section 80 subsection (1) InsO with regard to the assets from the continued self-employment activities with overall effect as to all objects and assets by virtue of the release declaration. As separate assets that are outside of the scope of the insolvency, income earned by the debtor from self-employment activities after the effective date of the release declaration is fundamentally available solely to new creditors whose claims first arose after the release declaration and not, however, the (prior) insolvency creditors as part of the insolvency estate.

However, a release declaration does not give rise to the mandatory presumption under insolvency law that the employer has regained his ability to pay within the meaning of the rules governing insolvency benefits under SGB III. In pursuit of dual purposes, the release of a self-employment activity within insolvency proceedings is not only intended to provide the debtor to successfully continue his self-employment and an opportunity for an economic fresh start, but rather the insolvency estate is likewise intended to be relieved of additional liabilities from the debtor’s continuing commercial activities. Furthermore, the provisions of section 35 subsection (2) InsO is likewise a consequence of the fundamental protection accorded the debtor’s freedom of profession. Accordingly, as a rule it remains to be seen whether ability to pay may be restored through the continuation of self-employment activities by means of a release. In this case, the employer did not regain the ability to pay according to the factual findings of the LSG, which are binding on the Senate (section 163 SGG), including a consideration of the short period between the two insolvency events. With regard to conducting another insolvency plan process, the Senate already emphasised that it precludes competition between the regular insolvency proceedings and the insolvency plan process to exclusively benefit the insolvency plan process by creating a special benefit for creditors by means of the repeated recognition of claims to insolvency benefits. Any trust that the plaintiff had in the potential restoration of the ability to pay of her employer cannot create a new claim to insolvency benefits because the requirements of section 165 subsection (3) SGB III have not been satisfied. This interpretation and application of section 165 subsection (1) first sentence number 1 SGB III does not conflict with the provisions of Article 2 (1) of Directive 2008/94/EC. The Directive relates to a formal insolvency event and permits the member states to combine several formally independent insolvency proceedings that are materially continuing however factually-related into collective proceedings. However, such a combination is not ordered from a European law standpoint; it does not exist under national law. The European legal rule does not spell out the circumstances under which an insolvency event that has already occurred has concluded for employment promotion purposes in order to be able to presume a new insolvency event.

Judgment of 04 April 2017 - B 11 AL 19/16 R

An ineligibility period based on insufficient personal efforts is applicable even if the eligible beneficiary makes the personal efforts effectively specified in an integration agreement in a specific case however does not provide verification on a timely basis.

The plaintiff has lodged suit to challenge a notice of action in which the unemployment insurance institution suspended approval for unemployment insurance benefits (“ALG”). It claimed that an ineligibility period due to insufficient personal efforts (section 144 subsection (1) second sentence number 3 Volume Three of the Social Insurance Code - Employment promotion (“SGB III”) prior version, now section 159 subsection (1) second sentence number 3 SGB III) was in effect from 1 to 14 February 2012.; concurrently, the right was reduced for the corresponding period.

The plaintiff was employed as a baker in Luxembourg on a rotating shift basis and lived in Germany. He commuted to work daily. He had to stop working for health reasons. The plaintiff notified the unemployment insurance institution that he was unemployed in November 2011 and applied for ALG. He was granted benefits for a period of 450 days. He concluded an integration agreement with the defendant unemployment insurance institution on 5 January 2012. The parties agreed, inter alia, that the plaintiff was required to actively apply for jobs within 50 kilometres of his residence five times per month commencing January 2012. He was required to document all written, telephonic and personal application efforts on a list and send it to the defendant by mail prior to 31 January 2012. In the integration agreement, the defendant also made commitments to provide benefits to the plaintiff (job-application coaching, job application and travel expenses) and informed him of the legal consequences in the event that he did not verify his personal efforts. After the plaintiff failed to verify job application efforts by 31 January 2012, the defendant suspended approval of ALG between 1 and 14 February 2012 due to the start of an ineligibility period due to insufficient personal efforts (notice of action dated 7 March 2012). Protest, complaint and appeal were all without success.
In his appeal, the plaintiff alleged a violation of section 144 subsection (1) second sentence number 3 SGB III (prior version). He performed the required personal efforts. He argued that the fact that he had merely not verified his activities was insufficient to trigger the ineligibility period.

The Federal Social Court (Bundessozialgericht - “BSG”) denied the defendant’s appeal. The unemployment insurance institution was permitted to suspend the approval of benefits because an ineligibly period commenced on 1 February 2012 due to insufficient personal efforts. This suspended ALG for two weeks. The plaintiff and the defendant specified the plaintiff’s obligations with regard to his personal efforts in an integration agreement dated 5 January 2012. An integration agreement within the scope of unemployment insurance (section 37 subsection (2) SGB III) is an exchange contract under public law (sections 53 et seq. Volume Ten of the Social Insurance Code - Social welfare administrative procedure and social welfare data protection (“SGB X”). Such a contract may contain agreements specifying the inclusion objective, job placement efforts related to the specific person, the eligible beneficiary’s personal efforts and the benefits related to the specific case. The integration agreement concluded on 5 January 2012 is not void. The plaintiff agreed to undertake personal efforts and to provide verification by certain deadlines. These obligations related to reciprocal obligations by the defendant - such as job application coaching and the assumption of job application and travel costs. In such a case, the agreements made are only to be examined as to their invalidity (section 40 SGB X). The plaintiff did not - as he had agreed - provide verification of this personal efforts to the defendant by 31 January 2012. The requirements for an ineligibility period are not to be understood to (solely) relate to undertaking the personal efforts. In point of fact, based on its text, the provision also requires that the unemployed person “verify” his or her personal efforts. A statutory requirement to provide verification does not raise any concerns. The purpose of such a requirement is to be able to examine whether the unemployed person in a particular case has undertaken the agreed efforts. The requirements for an ineligibly period were also satisfied in all other respects.

Law of contributions

Judgement of 16 August 2018 - B 12 KR 19/16 R

The interest in gaining a competitive advantage as a foreign enterprise in the target state (here: Germany) through the agreed continuation of foreign law by means of lower social security contributions over other enterprises and employees operating in the target state and subject to the social security system there is not a sufficient reason for extending the secondment by concluding an exceptional agreement under European law.

In principle, companies from the European Union are not entitled to the conclusion of exceptional agreements under which the social law regulations at the company’s registered office also apply to its employees who have been working in Germany for many years. However, the rejection of an agreement is subject to judicial review.

The plaintiff, a Polish company, deployed workers on construction sites in Germany for the years 2005/2006 as well as other years. It applied to the competent Polish body (ZUS) for a retroactive derogation agreement between ZUS and the defendant Deutsche Verbindungsstelle Krankenversicherung - Ausland (DVKA) pursuant to Article 16(1) of Regulation (EC) No 883/2004 with a view to the application of Polish law: Based on this, two or more Member States, the competent authorities of those Member States or the bodies designated by those authorities may, by common agreement, provide for derogations from Articles 11 to 15 of Regulation (EC) No 883/2004 (formerly Article 17 of Regulation <EEC> No. 1408/7) in the interests of certain persons or groups of persons.

Social security schemes in this case were still governed by Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community. This Regulation has been replaced with effect from 1 May 2010 by Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems. The following principles apply: workers are subject to the social security legislation of only one Member State of the European Union, usually the Member State in which they are employed. Unless the Regulation provides otherwise, this shall also apply where they reside in the territory of another Member State or where their employer or the undertaking which employs them has its head office in the territory of another Member State. Special rules apply to cases of posting of workers to another EU country: workers posted by their employer to perform work in another EU Member State continue to be subject to the legislation of the sending state (employer’s place of business), provided that the expected duration of this work does not exceed twelve months or, as of 1 May 2010, 24 months and that they do not replace another worker for whom the posting period has expired. Irrespective of the foreign application of social tariffs in the case of secondments that is strictly limited in time, two or more Member States or the competent authorities of such States may agree to exceptions to the basic provisions of European law in the interests of certain workers or groups of workers.

The Federal Social Court dismissed the complaint against the rejection of the agreement by the DVKA. It is true that the rejection of an exception agreement must be subject to judicial review because of the constitutional requirement of effective legal protection. However, there was no overriding interest on the part of the employees which could possibly justify ordering DVKA to conclude the sought-after agreement. In addition, the requirement for a focal point (more than 25%) of the company’s activities at its registered office in another Member State of the European Union required in order to avoid letter-box companies conformed to established administrative practice. The interest in gaining a competitive advantage as a foreign enterprise in the target country (here: Germany) through the continued application of foreign law by means of lower social security contributions over enterprises resident in the target country and subject to the social security system there does not justify the assumption of a claim to an exceptional agreement. The same applies with regard to the processing time and the hope of the plaintiff company with regard to the price calculation that an agreement could be reached.

Pension insurance

Judgement of 21 March 2018 - B 13 R 15/16 R

In accordance with European law, a Czech pension must be credited to the German old-age pension at the percentage rate at which the Czech periods of insurance overlap with pension-relevant periods under federal law, without a need to assess these periods in detail.

The dispute concerned the suspension of the plaintiff’s pension due to the payment of Czech benefits and the amount of the subsidy for health insurance expenses in the period between July 2007 and December 2011.

The plaintiff, who was born in Prague in 1942, is the holder of a displaced person card A and has private health insurance. From September 1956 to June 1959 he attended grammar school in Czechoslovakia and then studied in Prague until December 1964. He was then employed in Czechoslovakia until May 1969, with a break for military service. He then worked in Austria for around approximately one and one-half years. He has lived in Germany since January 1971 and was subject to compulsory insurance in Germany from February 1971 until the start of his old-age pension.

Starting 1 February 2007, the defendant granted the plaintiff a standard old-age pension and, by virtue of a later decision, also a subsidy for his health insurance expenses. Since 1 January 2007, the plaintiff has been receiving a Czech old-age pension based on an insurance period from September 1956 to 8 May 1969 (153 months). The calculation of the German pension was based on periods of school and university education from January 1959 to December 1964 and on contribution periods assessed under the Act on Foreign Pensions (FRG) from January 1965 to May 1969 (125 months). With regard to the periods to be simultaneously credited for purposes of the Czech pension and the German pension, the defendant calculated a ratio of 0.8170 (125 months: 153 months) and suspended the German pension in part in an amount equal to that part of the Czech pension that corresponded to this ratio. Subsequently, it adjusted the amount to be suspended several times. In a decision dated 11 August 2010, it again ruled on the amount to be suspended and the amount of subsidies for health insurance expenses - retroactively to 1 February 2007. It rejected the plaintiff’s opposition to that decision.

The plaintiff was also unsuccessful during the initial legal action and on appeal. In support of its decision, the Higher Social Court essentially held that the defendant was entitled to find that the right to receive an old age pension could be suspended by virtue of the receipt of the Czech pension under section 31 FRG. The asserted purpose of this provision is to avoid the double payment of benefits. The Czech pension was to be counted towards the German pension to the extent of the temporal overlap. The German pension would then be suspended to such an extent. Nor is the plaintiff entitled to a higher subsidy for health insurance, which is based on the amount paid to the pensioner and not on what he could otherwise claim without the finding suspending benefits.

The plaintiff’s appeal before the Federal Social Court was unsuccessful. The suspension ordered by the defendant of his German old-age pension amounting to 81.70% of the Czech old-age pension paid to him and the amount of the contribution to the costs of his health insurance are not objectionable.

The legal basis for the partial suspension is section 31 FRG. The provision continues to apply even after the Czech Republic’s accession to the European Union (EU) and thus under the application of EEC Treaty 1408/71 (Council Regulation EEC No. 1408/71 of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community) or EC Treaty 883/2004 (Regulation EC No. 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems). Pursuant to Article 7(2)(c) of Regulation (EEC) No 1408/71 in conjunction with point 5 of Annex III to that Regulation, point 14 of the Final Protocol of 27 July 2001 between the Czech Republic and the Slovak Republic (SVA), as set out in that provision, shall continue to apply. It does not affect German legislation on, inter alia, benefits for periods of insurance credited under the FRG. Therefore, section 2, first sentence FRG does not preclude the application of section 31 FRG in the present case. Under EC Treaty 883/2004 the application of the FRG is standardised in Article 83 EC Treaty 883/2004 in conjunction with Annex XI - Germany - point 7.

Section 31 (1), first sentence FRG provides that: “If the person entitled is granted a pension by a social security institution... outside the Federal Republic of Germany from the statutory pension insurance... for periods to be taken into account under federal law, the pension shall be suspended for the amount converted into euro which is paid outside the Federal Republic of Germany as a benefit by the social security institution. Periods to be taken into account in this sense are exclusively those on which both German and foreign pension accruals are based, i.e. for which there is a temporal congruence.”

The wording of section 31 FRG does not indicate - contrary to the plaintiff’s opinion - that the “periods to be taken into account under federal law” must also have been directly included in the pension calculation in the form of a pension increase. On the contrary, an interpretation which is based on temporal congruence of pension law-relevant facts alone does justice to the integration concept underlying the FRG. Temporal congruence understood in this way also guarantees - in accordance with the intent of section 31 FRG - the avoidance of duplication of benefits and is solely appropriate and in conformity with European law based on the intent to achieve its purpose.

The plaintiff had no right to a higher subsidy for the costs of his private health insurance than that granted by the defendant.

Occupational accident insurance

Judgement of 30 March 2017 - B 2 U 10/15 R

The decision of the accident insurance institution as to whether and, if so, which joint and several debtor is liable and to what extent, is within the reasonable exercise of its discretion.

If a British Limited (registered office in Great Britain) actually conducts its business at the place of its branch in Germany, this place is regarded as the registered office of the company under accident insurance law.

The parties are disputing the legality of an official decision on contributions to accident insurance amounting to EUR 8,639.41 against a limited liability company under English and Welsh law.

The plaintiff was a shareholder and sole managing director of Bau & Forstbetrieb LHW Limited (LHW Limited), a limited liability company incorporated under English and Welsh law and registered in the Companies House for England and Wales, founded in November 2005 by him and two other shareholders. The liable equity capital was 100 pounds sterling. The registered office of LHW Limited was Birmingham. The company’s purpose included bricklaying, plastering and concrete work. On 29 December 2005, a branch of LHW Limited, whose business purpose was identical to that of the main undertaking, was registered as a trade with the municipality of R.-N. in Germany at an address in R.-N. In addition, the branch office was entered in the commercial register of the Frankfurt (Oder) District Court. Business operations commenced on 1 January 2006. In the notification of business registration received by the defendant in 2006, the plaintiff was appointed as agent of LHW Limited. After business operations were discontinued and the business was deregistered on 28 February 2007, the Frankfurt (Oder) District Court opened insolvency proceedings against the assets of LHW Limited by order of 2 April 2007. The defendant demanded personal accident insurance contributions of EUR 8,639.41 from the plaintiff.

The Social Court annulled the contested contribution notices. Recourse against the plaintiff under section 130 (2) of the Seventh Book of the Social Code - Accident Insurance - (SGB VII) was not possible because the provision only covers cases in which a foreign undertaking has no registered office in Germany at all. A place of business would be located in Germany would if there were a permanent establishment in the country under the responsible management of the entrepreneur. According to the intent of the provision, recourse against an authorised representative would not then be necessary because the branch would be person who could be reached by the accident insurance institution. The Federal Social Court reversed the judgement of the Regional Social Court and referred the case back to that court for a new hearing and decision. As such he is liable in accordance with section 150 (2), second sentence in conjunction with section 130 (2), second sentence SGB VII with the entrepreneur as joint debtor for her (contribution) obligation and could be claimed as such. As a managing director with sole power of representation, he was an authorised representative within the meaning of section 130 (2), first sentence SGB VII. Nor did LHW Limited have a domestic registered office. According to both the articles of association and the foundation theory of the ECJ, LHW Limited continues to have its registered office in Great Britain. The rulings of the European Court of Justice (ECJ) on the foundation theory have provided that the basic idea is that if an EU national lawfully establishes a limited liability company in one Member State, but the company’s business activity then takes place exclusively in another Member State, the law of the founding State applies to the company. The plaintiff cannot establish a company under foreign law cherry-picking amongst his options, pursue business activities exclusively in Germany and nevertheless want to be treated as a domestic company. Moreover, in the case of foreign companies which are less solvent due to a lack of minimum capitalisation, there is a need to appoint an authorised representative jointly and severally liable under section 130 (2) of the Second Book of the Social Code (SGB VII). In particular, section 130 (2), third sentence SGB VII, which states that the place of the domestic permanent establishment is the registered office, also speaks in favour of a definition based on legal aspects. Such a fiction would not be necessary if the mere existence of a branch would establish a domestic registered office without need to look further. Finally, pursuant to sections 13d et seq. of the German Commercial Code (HGB), a branch would be registered for foreign companies within the scope of application of the HGB without any change in the registered office.

The Federal Social Court has quashed the judgement of the Higher Social Court. It is true that at the time of the last administrative decision the applicable requirements under section 130 (2) in conjunction with section 150 (2), second sentence SGB VII had been satisfied. However, the defendant failed to exercise the discretion granted to it in the selection of the debtor.

The party obliged to pay the contribution was initially and exclusively LHW Limited. According to the wording of the first sentence of section 130 (2) (“If an undertaking has no registered office in Germany...”), the provision only contains a rule applicable if the enterprise has no domestic registered office. Accordingly, it does not apply to companies domiciled in Germany. In point of fact, section 130 (1), first sentence SGB VII, which does not initially provide for the appointment of an authorised representative, applies in such cases. The branch of LHW Limited was a company with its registered office in Germany within the meaning of section 130 (1), first sentence SGB VII, because the registered office for purposes of accident insurance law was not the registered office of LHW Limited in Birmingham but the location of the branch in R. -N. in Germany. The headquarters of a company is its organisational centre, from which the business is managed from a commercial and technical standpoint. For LHW Limited, this was the location of the domestic branch. An understanding of the term “registered office” based on legal aspects as assumed by the LSG is not compatible with the term “enterprise” of the SGB VII relating to the actual exercise of activities. However, the plaintiff also become an obligor for purposes of the claim to a contribution at a later date. Section 130 (2), second sentence SGB VII extends “the duties of the entrepreneur”, which also include the duty to pay contributions (Section 150 (1), first sentence SGB VII), to its authorised representative. According to section 150 (2), second sentence SGB VII “the authorized representatives named in section 130 (2), first sentence... is liable... with the entrepreneurs as a joint debtor”. Pursuant to section 130 (2), first sentence SGB VII, the entrepreneur (section 137 (3) no. 1 SGB VII) must appoint an authorised representative with a registered office in Germany if its company (section 121 (1) SGB VI) has no registered office in Germany. These conditions were met at the time of the last administrative decision on 10 December 2010, which was decisive for the action for annulment. The legal obligation to appoint an authorised representative domiciled in Germany arose for LHW Limited for the first time on 1 March 2007 at midnight after it had ceased business operations in its domestic branch as an entrepreneur domiciled in the United Kingdom on 28 February 2007 at midnight and deregistered the business. As a result, she no longer had a registered office in Germany as of 0.00 a.m. on 1 March 2007. At that moment, the defendant and the plaintiff became a second debtor for the contribution because the entrepreneur had expressly designated the plaintiff, who was domiciled in Germany, as her “authorised representative” in the business registration of 29 December 2005 and had named him in the commercial register registration as the managing director with sole power of representation and thus appointed him as her authorised representative in Germany. As such he is liable in accordance with section 130 (2), second sentence in conjunction with section 150 (2), second sentence SGB VII with the entrepreneur as joint debtor for her (contribution‑) obligation and could be claimed as such.

However, the defendant has failed to exercise the discretion granted to it by section 150 (2), second sentence SGB VII as to whether and, if so, which joint and several debtor it is liable for and to what extent. The possibility of a creditor under public law “to demand payment ... as desired from any (joint) debtor in whole or in part as desired” (cf. section 421, first sentence German Civil Code (BGB)) is constitutionally transposed in the law of social contributions as a part of public law in such a way that public and private interests must be weighed when selecting the joint debtor and determining the quantity (“in whole or in part”). In public law, the discretionary decision takes the place of the ability to make a decision at will under civil law. As a holder of official authority, the accident insurance carrier is bound by fundamental rights, so that a negative decision as to which of several holders of fundamental rights (= debtors) it wishes to assert a claim against, and to what extent (= encroachment on fundamental rights), is not at the discretion of the public authority, but at its reasonable (selective) discretion, to which the general principles of section 39 of the First Book of the Social Code, Book - General Part - (SGB I) apply. A claim may only be asserted against the individual party liable for contributions on the basis of a discretionary decision, taking into account his fundamental rights of freedom, the principle of proportionality and the prohibition of arbitrariness. Every joint and several debtor has a legal right to have the accident insurance provider make a negative decision over its claim free of discretionary error. Neither the contribution assessment of 7 August 2010 nor the notice of opposition of 10 December 2010 contained any discretionary considerations in this respect, so that both administrative acts had to be revoked due to non-use of discretionary powers.

Law of panel physicians

Judgment of 30 November 2016 - B 6 KA 38/15 R

Panel physicians may not close their practices in order to exercise pressure on health insurance funds and associations of statutory health insurance physicians to increase remuneration for services provided by panel physicians by refusing to treat insured patients (“physicians’ strike”).

The plaintiff, a doctor serving as a panel physician specialising in general medicine, closed his practice on 10 October 2012 and 21 November 2012 in order to participate in a panel physicians’ “warning strike”. In response, he received an admonishment from the Association of Statutory Health Insurance Physicians (“KÄV”). The KÄV claimed that the plaintiff had intentionally breached his duties as a panel physician given that he breached his obligation to be present in his practice during office hours without there having been permissible grounds for an interruption.
The Stuttgart Social Court denied the complaint lodged in response to the admonition with the explanation that the law of panel physicians did not provide for a right to strike on the part of physicians as grounds to interrupt work at their respective practices; the protection afforded by Article 9 (3) of the Basic Law of the Federal Republic of Germany (Grundgesetz - “GG”) (“freedom of association”) did not apply to panel physicians. In his appeal, the plaintiff asserted that a strike on the part of panel physicians was justified if it was proportionate. As a matter of principle, panel physicians cannot be placed in worse position than employees or civil servants. He claimed that panel physicians also were included within the protected scope of Article 9 (3) GG and Article 11 (1) of the European Convention for Protection of Human Rights and Fundamental Freedoms (“ECHR”). The strike did not endanger patient care or the functionality of the system as such given that sufficient emergency care and/or coverage by colleagues had been provided for.

The panel physician’s appeal was unsuccessful. The defendant’s decision to issue a disciplinary admonition to the plaintiff was found to be lawful. He had intentionally violated his duties as a panel physician by repeatedly closing his practice during office hours in the fall of 2012 in order to participate in a panel physicians’ “warning strike”. Under section 24 subsection (2) of the Admission Regulation for Panel Physicians (“Ärzte-ZV”), panel physicians are obliged to hold office hours at the panel physician’s offices, i.e. to be available to provide patient care as a panel physician during posted office hours (so-called “compulsory presence”). The panel physician is only relieved of this obligation in cases in which the Ärzte-ZV provides for a substitute. However, the scenarios listed there (i.e. section 32 Ärzte-ZV) - including illness, holiday, training - do not include participation in a “warning strike”.

The plaintiff may likewise not claim that he is entitled to “right to strike” that is protected under constitutional or human rights law. The Federal Social Court has left unresolved the question of whether members of the liberal professions, which includes panel physicians, may rely on the rights provided for in Article 9 (3) (“freedom of association”) or Article 11 (1) ECHR or whether a “right to strike” may be derived from the nature of the freedom of occupation (Article 12 (1) GG). Independent of this issue, a right on the part of panel physicians to enforce demands vis-à-vis the statutory health insurance funds by means of “industrial action” has been restricted through the provisions of the law of panel physicians in a manner that does not raise constitutional concerns.

Such provisions directly preclude the rules applicable to care provided by panel physicians - in particular payment for services - from being negotiated between the participating physicians and the statutory health insurance funds and, if applicable, enforced by means of “industrial action”. In designing the law of panel physicians, the legislature created equilibrium between the partially-conflicting interests of patients and service providers in order to thus ensure reliable care to the insured patients on reasonable terms. The material structural elements of the law of panel physicians include a system of collective agreements as well as the transfer of the duty of ensuring care to the KÄV’s.

Within the system of collective agreements, the statutory health insurance funds and the KÄV’s, as representatives for the physicians, occupy the position of counter-parties. Viewed historically, the replacement of separate contracts between physician and health insurance fund by collective agreements services to protect the panel physicians. Within the scope of the legislative framework, the legislature grants the parties to the collective agreements a high degree of autonomy by granting physicians and health insurance funds the right to specify the details for the provision of care by the panel physicians in so-called “standard-setting contracts” as part of their joint self-governance. At the same time however, the legislature also imposes on them the obligation to reconcile their interests by concluding the necessary agreements based on the directive to cooperate (section 72 subsection (1) first sentence Volume V of the Social Insurance Code - Statutory health insurance - SGB V). If the health insurance funds and the KÄV’s are not able to agree as to the contents of a contract at the regional level - or their umbrella organisations at the national level - such a conflict is not conducted by means of industrial action such as a “strike” or “lock-out” but rather is resolved by means of binding decisions by courts of arbitration the lawfulness of which may be reviewed by the courts.

By transferring the duty to ensure the provision of care to the KÄV’s, they are obliged to ensure that care is provided to the degree provided by law and to assume a guarantee vis-à-vis the health insurance funds and their associations for ensuring that care conforms to the statutory and contractual requirements. The individual panel physician is bound by this duty to provide care by virtue of his license and as a member of the KÄV. On the other hand, the duty to provide care also creates responsibly on the part of the KÄV’s and their members to ensure the functionality of the system created by the law of panel physicians and statutory health insurance.

Social compensation law

Judgment of 16 March 2016 - B 9 V 6/15 R

1. The application deadline for the retroactive grant of benefits has not been missed by no fault of the applicant solely because the applicant comes from a different foreign language and cultural group.
2. Youth Welfare Offices are not integrated into the administrative process for administering benefits based on a theory of divided responsibilities within a functional unit nor are they closely-linked to such administration from a material-legal standpoint.

The requirement of a foreign national who is not familiar with applicable German laws (in this case: the deadline for an application for victims’ compensation under section 60 subsection (1) first sentence Federal Law on War Pensions (Bundesversorgungsgesetz - “BVG”)) to inquire as to their contents doesn’t require anything unreasonable of the applicant even from a constitutional perspective.

The plaintiff, who is from current-day Congo, became the victim of an act of violence within the meaning of the Victims’ Compensation Act (Opferentschädigungsgesetzes - “OEG”) in January 1997. She was granted benefits under the OEG from the date of an application submitted in July 2005. She is now requesting benefits under the OEG for the period prior to the application, namely from January 1997 to June 2005. The defendant Regional Association denied the earlier commencement of benefits as did the Social Court (Sozialgericht - “SG”) and the Regional Social Court (Landessozialgericht - “LSG”). The latter explained, inter alia, that the plaintiff had no right to benefits prior to submitting the application because she - as was also the case for her father who was likewise eligible for benefits - had not been prevented through no fault of her own from applying for victims’ benefits prior to the expiry of the annual deadline that commenced upon the injury.

The Federal Social Court denied the plaintiff’s appeal of the judgment of the LSG because the plaintiff had no entitlement to benefits pursuant to the OEG for periods preceding submission of the application in July 2005. During the period at issue, the plaintiff’s father - as her authorised representative for personal and property affairs - was not hindered through no fault of his own from applying for the benefits concerned prior the expiry of the annual deadline that commenced upon the occurrence of the injury. He was subjectively able to comply with the reasonable duty of care required under the circumstances. Accordingly, other standards do not apply to foreign nationals from a different language or cultural group in this context.

Rights of severely disabled persons

Decision of 8 March 2018 - B 9 SB 93/17 B

The Senate has already decided that a mental disorder can also lead to the existence of the prerequisites for a classification of G and has stated that the comprehensive concept of the disabled within the meaning of section 2 (1), first sentence of the Social Code, Book Nine - Rehabilitation and Participation of Disabled Persons (SGB IX) - requires the inclusion of all physical, mental and psychological impairments in the light of both the constitutional prohibition of discrimination and the directly applicable prohibition of discrimination under the UN Convention (Article 3 (3), second sentence of the Basic Law; Article 5 (2) UNCRPD). (...) A severely disabled person may therefore also be entitled to disability compensation G if there are psychosomatic or mental disabilities and pathologies with sufficiently severe effects on walking function (Judgement of 11/8/2015 - B 9 SB 1/14 R - SozR 4-3250 § 69 Number 21).

An appeal against denial of leave to appeal based on the grounds of fundamental significance regarding legal questions on the consideration of mental illnesses without effects on walking ability when conferring classification G must therefore show why the questions raised have not yet been clarified by case law of the highest court.

Decision of 21 December 2017 - B 9 SB 61/17 B

An autistic person is not entitled to an oral hearing by means of an online chat procedure lasting several weeks. Nor can he invoke Article 13 of the United Nations Convention on the Rights of Persons with Disabilities, of 13 December 2006 (CRPD), which obliges signature states to ensure equal and effective access to justice.

On the merits, the plaintiff seeks the award of a higher degree of disability (GdB) as well as the determination of the prerequisites for various signs of autism. The complaint was unsuccessful before the Social Court and the Higher Social Court. After the referral back by the Federal Social Court, the Higher Social Court conducted further investigations, as a result of which the defendant made a partial admission, which the plaintiff rejected. Following the resignation of the mandate by his attorney, the plaintiff demanded accessibility for the oral hearing in the form of a remote hearing via the Internet, which was to extend over several weeks, similar to the proceedings in an online forum. The plaintiff did not give his consent to the decision without an oral hearing and did not make use of the possibility granted to him to send a person appointed to represent him or to appear accompanied by him. In the absence of the plaintiff, the Higher Social Court sentenced the defendant on the basis of oral proceedings in accordance with his partial confession and dismissed the plaintiff’s appeal. The Social Courts Act does not provide for an online chat requested as by the plaintiff for the conduct of an oral hearing.

The Senate rejected the plaintiff’s request for the appointment of an emergency lawyer and legal aid for an appeal against denial of leave to appeal rejected and dismissed them. The analogous legal question of whether Article 13 of the UNCRPD grants an autistic person a right to an oral hearing in the form of an online chat does not reveal any need for clarification. An online chat to conduct the oral hearing over several weeks does not result from Article 13 UNCRPD nor from the procedural provisions of the Social Courts Act and the Judicial Systems Act.

Judgment of 16 March 2016 - B 9 SB 1/15 R

1. Persons who suffer from Parkinson's disease are entitled to the code “aG” if, due to the severity of their illness, they are permanently unable to move outside of their vehicle without assistance or only with great difficulty.
2. The requirement for constant use of a wheelchair is of material importance in the case of the code “aG” in association with Parkinson's disease.

The comprehensive definition of a disability within the meaning of section 2 of Volume Nine of the Social Insurance Code - Rehabilitation and participation by disabled persons - (SGB IX) requires the inclusion of all physical, mental and emotional impairments in light of the constitutional prohibition of discrimination and based on the direct applicability of international law (Article 3 (3) second sentence Basic Law of the Federal Republic of Germany; Article 5 (2) United Nations Convention on the Rights of Persons with Disabilities).

The plaintiff suffers from Parkinson's disease. In the course of a re-assessment, the defendant state determined a degree of disability of 100 as requested and satisfaction of the requirements for the code H (“Helpless” as well as “G” for mobility in traffic and the right to be accompanied by a companion “B”), however denied the request to find that the satisfactions for the code aG (“exceptional walking disability”) has been met. The Social Court (Sozialgericht - “SG”) sustained the complaint lodged against this decision and as an explanation stated, among others, after evidence gathering had been completed the plaintiff was only able to move with great difficulty in the so-called “off phases”. The court found that the expert who testified explained in an understandable manner that the plaintiff was subject to severe motor skill related impairments for significant parts of the day. In response to the defendant’s appeal, the Regional Social Court (Landessozialgericht - “LSG”) denied the complaint and, in turn, stated that the question of whether conditions of near total immobility could be compared to that of paraplegics need not be addressed. In any event, when compared to seizures, the requirement of permanence had not been satisfied.

The plaintiff’s appeal was unsuccessful. The plaintiff has no right to a finding that the requirements for the code aG had been met. Parkinson's disease is not included among the codified examples of cases where the requirements for the code aG may be presumed as a matter of course. However, Parkinson's disease does belong to those illnesses that may be equated with the codified examples by means of a determination from the treating physician if, due to the severity of their illness, persons affected are permanently unable to move outside of their vehicle without assistance or only with great difficulty.

Federal Act on Parental Allowance and Parental Leave (“BEEG”)

Judgment of 29 June 2017 - B 10 EG 5/16 R

At issue is whether the plaintiff may demand parental allowance for her daughter born in June 2014 under consideration of holiday allowance and Christmas bonus paid during the assessment period.

Pursuant to her contract of employment, the plaintiff had a right to monthly wage payments equal to 1/14 of the agreed annual remuneration. The once-annual payment of a holiday allowance in May and a Christmas bonus in November were supposed to each equate to 1/14 of agreed annual remuneration. The defendant state granted the plaintiff parental allowance without consideration of the holiday leave and Christmas bonus payments. The state claimed that such wage payments were excluded from the assessment based as “other payments”. In contrast to the Social Court, the Regional Social Court ordered the defendant to pay increased parental allowance considering the holiday leave and Christmas bonus payments. According to the court, holiday leave and Christmas bonus payments were paid twice during the assessment period and thus on a regular basis and were consequently to be characterised as current wages.

The appeal of the defendant state was successful. The plaintiff did not have a right to higher parental for her daughter allowance beyond what had already been determined without consideration of holiday leave and Christmas bonus payments made during the assessment period. The defendant correctly approved parental allowance solely on the basis of current average income from employment - in this case current monthly wages - during the assessment period comprising the twelve calendar months preceding the month of birth. Holiday leave and Christmas bonus payments owed by contract and in fact paid during the assessment period did not comprise part of current wage income but rather so-called “other income” that was irrelevant for purposes of assessing parental allowance. If holiday leave allowance and Christmas bonus are paid each year in May and November respectively they do not comprise repeated payments during the assessment period. The circumstance that holiday leave allowance and Christmas bonus are to be included as part of annual remuneration and each of them correspond to the amount of regular monthly wages does not make them repeated payments. By contrast, they represent event-related one-time payments, in each case prior to the normal holiday leave and Christmas periods.

Asylum Seekers Benefits Act

Judgment of 12 May 2017 - B 7 AY 1/16 R

The dispute involved a claim to increased benefits under the Asylum Seekers Benefits Act (Asylbewerberleistungsgesetz - “AsylbLG”) for the month of January 2013.

The plaintiff entered the Federal Republic of Germany in 2002. He claimed to be a citizen of Cameroon. He did not provide a passport or passport substitute. The rejection of his application for asylum became final in 2004. Since then, the plaintiff has been permitted to remain on a discretionary basis (temporary suspension of deportation under section 60a subsection (2) first sentence Residence Act (Aufenthaltsgesetz - “AufenthG”)). Through April 2013 the immigration authorities requested that he assist in obtaining a passport or passport substitute at least 19 times; he was interviewed twice by Cameroon’s embassy for this purpose. At both of these interviews, the plaintiff remained silent in response to all questions he was asked. Since 2005, the defendant district has only granted the plaintiff reduced basic benefits under the AsylbLG (cf. section 1a number 2 AsylbLG - prior version; since 1 March 2015: section 1a subsection (3) AsylbLG). For the last month subject to dispute, January 2013, the defendant merely provided him vouchers that could be used to purchase food, clothing and health and hygiene items totalling € 168.12 (so-called “physical subsistence minimum”) in addition to accommodation at shared accommodations in as in-kind benefit, however he was not provided money that could be freely spent (so-called “socio-cultural subsistence minimum”).

The Cottbus Social Court denied the plaintiff’s complaint requesting increased benefits. The “leapfrog appeal” filed by the plaintiff was denied by the Federal Social Court on the following grounds: Pursuant to section 1a number 2 AsylbLG in the version in effect through 28 February 2015, foreign nationals who actually reside within the Federal Republic of Germany, are permitted to stay temporarily under section 60a AufenthG and for whom measures to end their residency cannot be executed on grounds for which they are responsible, only receive benefits under the AsylbLG to the extent unavoidable based on the circumstances of the specific case. Based on the application of this standard, during January 2013 the plaintiff was only entitled to benefits to the extent that they were unavoidable. The plaintiff had no right to additional benefits in order to satisfy personal needs of daily life (so-called “socio-cultural subsistence minimum”). This was the case because he had prevented the execution of his final deportation order only by virtue of his failure to cooperate in obtaining a passport and thus deliberately violated his duties of cooperation under immigration law following conclusion of the asylum proceedings. Under these circumstances, benefits below those necessary for basic necessities under section 3 AsylbLG may be provided according to the determinations of the legislature.

Constitutional law does not require a different interpretation. Section 1a number 2 AsylbLG, prior version, does not violate the fundamental right to providing a subsistence minimum that is in line with human dignity (Article 1 (1) in conjunction with Article 20 (1) Basic Law of the Federal Republic of Germany). Constitutional law does not preclude the legislature from linking the unrestricted grant of benefits to ensure a subsistence minimum under the AsylbLG to complying with obligations applicable under immigration law. The legislature is exercising its available discretion on a constitutional basis in section 1a number 2 AsylbLG, prior version. This does not result in the qualification of the right to benefits (on a standardised basis) based on immigration policy. On the contrary, the limitation on benefits is tied to abusive behaviour for which the eligible beneficiary is at fault and which the beneficiary may cease at any time - thus restoring unrestricted benefits. Furthermore, section 1a number 2 AsylbLG, prior version, requires that the particular circumstances of a given case be taken into consideration. In light of this, benefits may likewise be reduced over a period of years because the plaintiff was aware of his opportunities to avoid the reduction in benefits from the outset.

Social assistance

Judgement of 25 April 2018 - B 8 SO 20/16 R

After an uninterrupted stay abroad of more than four weeks, foreigners living in Germany are not entitled to a standard rate of living assistance.

The dispute involved higher benefits under the Twelfth Book of the Social Code - Social Assistance (SGB XII) during a stay in Turkey in May 2013.

The plaintiff, who was born in 1979, is a Turkish national and holds a residence permit. During the disputed period she received a fixed-term pension due to a full reduction in earning capacity. For April 2013, the defendant social welfare institution granted her subsistence benefits. From May 2013, the defendant provisionally suspended the benefit because the plaintiff was in Turkey from 2 April to 22 May 2013. Her opposition to this was (only) successful for the period after her return and in terms of accommodation and heating costs. Whereas the Social Court ordered the defendant to pay further benefits for the period from 1 to 22 May 2013, the Higher Social Court dismissed the action. In support of its decision, it stated that the plaintiff's entitlement to higher benefits was excluded on the ground that she had not actually resided within Germany.

The Federal Social Court referred the matter back to the Higher Social Court for a new hearing and decision because, in the absence of sufficient findings by that court, it could not conclusively decide whether, if necessary, benefits of the basic old age insurance and in the case of reduced earning capacity or in the case of the plaintiff’s earning capacity, benefits according to the Second Book of the Social Code - Basic Assistance for Job Seekers - (SGB II) could be considered. However, the plaintiff did not have a claim to livelihood assistance during the period in dispute. Pursuant to section 23 (1) first sentence SGB XII, this presupposes actual residence in Germany.

The concept of “actual residence” is in principle to be understood in the sense of a physical presence. No corresponding regulation applies to German citizens, but SGB XII does not provide for the grant of social assistance as a result of the linking of local jurisdiction to an actual stay in the jurisdiction of a social assistance institution, even in the case of only temporary stays abroad (such as holiday trips). The Federal Administrative Court did not regard this as a gap to be filled for the identical legal situation under the Federal Social Assistance Act, but rather as a consequence of the principle of territoriality. If there is no competent social assistance institution when travelling abroad, the consequence is that a person in need of assistance is not entitled to social assistance benefits in accordance with social assistance law for a need arising abroad. The Federal Administrative Court, however, emphasised in this decision regarding actual residence that the local competence of a social assistance institution based on the actual residence of an aid recipient does not end with every temporary absence of the aid recipient; rather, short-term absences of regularly one month during the authorisation period did not affect the competence of the social assistance institution for purposes of the effectiveness of social assistance. The ruling Senate agrees with this view with the proviso that short-term absences are harmless for (only) up to four weeks. Stays abroad of recipients of subsistence benefits are generally for purposes of making a holiday. The Federal Holiday Act provides for a minimum statutory holiday period of four weeks (section 3 Federal Holiday Act: 24 working days). It is therefore appropriate to accept an interruption of the actual stay based on this time frame while the benefits continue to be paid. Such an understanding must also be taken as a basis for the interpretation of actual residence within the meaning of section 23 SGB XII, because there is no room for a functionally differentiated interpretation. This is the case because, in the event foreigners have right to benefits under SGB XII, they are equal to those of Germans. However, the period in dispute is outside the four-week period.

The plaintiff cannot derive further rights under section 23 (1), fourth sentence SGB XII. Accordingly, the restrictions in sentence 1 do not apply to foreigners who - like the plaintiff - are in possession of a settlement permit. However, the requirement of actual residence does not change in this respect. Insofar as section 23 (1) fourth sentence refers to the “Restrictions pursuant to sentence 1”, this refers exclusively to the scope of benefits. However, this does not imply a renunciation of the actual residence and thus a better position compared to German citizens. Nor do other legal provisions give rise to any further rights on the part of the plaintiff. In particular, the plaintiff cannot rely on the European Convention on Social and Medical Assistance because Article 1 of that Convention also requires a stay in Germany.

However, the plaintiff may be entitled to benefits under the basic pension scheme in old age and in the event of reduced earning capacity if she is permanently fully incapacitated for gainful employment and the other requirements for corresponding benefits are met (in particular need). The decisive factor for these benefits is - in contrast to the provisions for subsistence benefits under Chapter 3 - the “habitual residence” of the beneficiary in the territory of the Federal Republic which the plaintiff also maintained during her stay abroad. For a final decision, however, sufficient findings of the Higher Social Court on the other conditions for provision of benefits are lacking.

Judgement of 26 October 2017 - B 8 SO 11/16 R

Underage Germans, who have their habitual residence abroad, can be granted social assistance in individual cases to ensure an appropriate school education according to the circumstances prevailing there.

The issue in dispute was the grant of social assistance for Germans abroad under the Twelfth Book of the Social Code - Social Assistance (SGB XII).

The underage plaintiff is a German national. Since 2007 he has lived in Plovdiv with his mother, who has sole custody and is a Bulgarian citizen. The defendant rejected his application in January 2010 for social assistance benefits for Germans abroad. The action initiated to oppose this decision was unsuccessful before the Social Court and the Higher Social Court. A claim was deemed to fail because no substantially unmet needs of the plaintiff are apparent and the plaintiff was not prevented from returning to Germany.

The Federal Social Court reversed the judgement of the Higher Social Court and referred the case back to that court for a new hearing and decision. According to section 24 (1) first sentence SGB XII, Germans who - as here - have their habitual residence abroad do not receive any benefits. Exceptions to this are governed by section 24 (1), second sentence SGB XII, insofar as this is unavoidable due to an extraordinary emergency and at the same time there is an objective reason listed in section 24 (1), second sentence SGB XII which makes a return to Germany impossible. The only potential grounds for a hindrance that may be considered here is exclusively the grounds referred to in section 24 (1), second sentence no. 1 SGB XII - the care and education of a child who must remain abroad for legal reasons. These conditions are met in the present case. This provision also covers German children living abroad with their parents or the parent with custody if they are (legally) prevented from returning in light of the habitual residence of their parents with custody and thus due to their own care and upbringing abroad (see judgement of 21/9/2017 - B 8 SO 5/16 R). The issue of whether the parents have the opportunity to return to this country is not decisive. In particular, the parents’ lack of willingness to return cannot be attributed to the children.

However, the Senate could not conclusively assess whether the granting of social assistance is indispensable due to an extraordinary emergency due to the lack of sufficient findings from the Higher Social Court. An extraordinary emergency presupposes special circumstances in the person claiming social assistance benefits for himself, which constitute the concrete and immediate danger of a not inconsiderable impairment of essential legal interests. These include life, physical integrity, a minimum subsistence level worthy of human dignity or other legal interests protected by fundamental rights of comparable essential significance. According to this, an extraordinary emergency also exists if participation in formal education that is appropriate according to Bulgarian conditions - findings by the National Social Court on this matter are lacking - is not ensured. The undeniability of granting social assistance benefits abroad to secure existential legal interests applies if the benefit is the only suitable means of averting the immediate and concrete danger to a legal interest of existential importance protected by fundamental rights. According to the findings of the Higher Social Court, which are binding on the Senate and have not been challenged by a thorough procedural complaint, the plaintiff’s livelihood, including accommodation and heating, is covered by funds received from payments of child support and child allowance. On the other hand, sufficient findings regarding cover for needs that cannot be assigned to the physical but to the socio-cultural subsistence level are lacking. This applies in particular to the needs associated with school education, such as school fees, the provision of personal school supplies and the transport of pupils. The Higher Social Court has admittedly stated that “in this respect the grandparents or the plaintiff’s mother apparently cover the demand, even if with borrowed funds”. However, the undeniability of social assistance benefits is not precluded, for reasons of effective legal protection, by the fact that the costs incurred after the application was lodged in January 2010 to cover existential needs were incurred in anticipation of the social assistance benefits to be expected by the grandparents or - with the aid of loans - by the plaintiff’s mother.

Judgement of 21 September 2017 - B 8 SO 5/16 R

1. Underage German children with a habitual residence abroad may be entitled to social assistance if they are (legally) prevented from returning because of their own care and upbringing abroad.
2. The unreasonableness of return does not constitute the yardstick for entitlement to social assistance abroad for German citizens.
3. An exceptional emergency is primarily determined by the general standard of living and the beliefs in the country of residence.
4. The “undeniability” of the benefit is an independent prerequisite for social assistance abroad; at the time the benefit is claimed, there must be a situation which, in particular, precludes reference to third parties.

The dispute concerned the assumption of costs for dental treatment and orthodontic treatment as social assistance for German citizens residing abroad.

The plaintiffs (mother and minor daughter) had been living in Spain with two other family members since July 2005. The first plaintiff is an epileptic and suffers from a brain tumour as well as psychological disorders; she was in need of Care Level III according to the law applicable until 31 December 2016. Since January 2007, the defendant has granted social assistance to German family members abroad. In 2008, the first plaintiff claimed reimbursement of the costs of dental treatment and the second plaintiff claimed reimbursement of the costs of orthodontic treatment, which the defendant, a supra-local social welfare institution, refused. A complaint filed against these actions was unsuccessful before the Social Court and the Higher Social Court. In any case, any such claim fails because the plaintiffs were not prevented from returning to Germany.

The Federal Social Court dismissed the first plaintiff’s appeal. It set aside the judgement of the Higher Social Court in respect of the second plaintiff’s appeal and referred the case back to the Higher Social Court for a new hearing and decision, insofar as claims in respect of orthodontic treatment amounting to EUR 1,474.00 were in dispute. In all other respects (costs of dental treatment on 8 July 2008 amounting to EUR 33.40, it also rejected the second plaintiff’s appeal.

The first plaintiff has no claims. Social assistance benefits for Germans with a habitual residence abroad can only be granted in accordance with section 24 (1), second sentence of the Twelfth Book of German Social Code - Social Assistance (SGB XII) to the extent that this is unavoidable due to an exceptional emergency and it is also proven that return to Germany is not possible for the reasons listed in section 24 (1), second sentence SGB XII. This is lacking here. According to the binding findings of the Higher Social Court, the first plaintiff was objectively able to return to Germany in any event in 2008 despite the need for long-term care. The approval decision in which the defendant assumes that there is an obstacle to return does not have any binding effect in this respect. The (subjective) unreasonableness of return is not decisive.

By contrast, the Senate was not able to decide whether the second plaintiff is entitled to further benefits on the basis of section 24 (1), second sentence SGB XII - except for the amount of EUR 33.40 for dental treatment - due to the lack of sufficient findings of the Higher Social Court. In the case of plaintiff 2, there is an obstacle to return pursuant to section 24 (1), second sentence no. 1 SGB XII because she is legally prevented from returning because of the habitual residence of her parents with custody and thus because of her own care and upbringing abroad. The wording of the statute permits such an interpretation. The decision of the parents to live in Spain cannot be attributed to the plaintiff cannot be attributed to her as her own decision even via the concept of legal representation. However, the Senate was unable to reach a final decision on whether an exceptional emergency situation existed with regard to orthodontic treatment. This term must be interpreted narrowly. This refers to special circumstances which, by their nature, stand out clearly from situations which give rise to a need under social assistance law in Germany. Even the question of the extraordinary emergency situation is determined by the general standard of living and the beliefs in the country of residence. An “exceptional emergency” conceivable according to these standards due to the medical necessity of orthodontic treatment is usually limited to claims such as might exist in Germany. The Higher Social Court did not made sufficient findings in this regard. In the event of an exceptional emergency arising from orthodontic treatment, the amount of any cash benefits to be paid would be limited to those costs which, in Spain, would be eligible for social assistance. If such social assistance benefits are excluded in principle in Spain, an obligation on the part of the defendant to pay benefits would at most still be considered if serious, irreversible damage to health would occur in the event of non-treatment, for which, however, the facts of the case have so far provided no evidence after discontinuation of treatment.

Finally, the requested benefits must be examined to see whether they were also unavoidable. The costs of EUR 33.40 for dental treatment are not unavoidable because of their small amount and in view of the fact that the other existential needs are fully covered by the approval of current benefits to secure a livelihood and the health insurance cover that exists in principle. As far as the costs for orthodontic treatment are concerned, the benefits are only unavoidable if the financial requirements arising in this respect have not already been covered elsewhere before they were applied for. In particular, debts to third parties abroad are not (also) to be covered by social assistance funds.

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