Nature of the Case
The case considers the constitutionality of the amount of the standard benefit for securing the livelihood of adults and children under the Hartz IV program in Germany.
The case considers the constitutionality of the amount of the standard benefit for securing the livelihood of adults and children under the Hartz IV program in Germany.
In 2005, Germany began the fourth stage of a program aimed at reducing the costs of the country’s social welfare system, an initiative named after its chief architect, Volkswagen personnel director, Peter Hartz. Hartz IV merged unemployment and welfare benefits, fixing the standard benefit for single people living in old West German states (including East Berlin) at 345 Euros per month. This amount was determined based on a statistical survey of income and expenditure of lower income groups. Benefits for other household members were determined as a percentage of 345 Euros. Unlike under previous programs, under Hartz IV, benefits were paid in a lump sum and additional payments were only permissible in exceptional circumstances.
In 2010, the Federal Constitutional Court (FCC) consolidated three cases where lower courts had suspended proceedings and submitted questions to the FCC regarding the constitutionality of Hartz IV. In the first case, a family of three alleged that the 825 Euros they received each month was insufficient, seeking higher benefits in the Higher Social Court of Hesse. The second case involved the children of people needing social assistance also alleged that their monthly benefits of 842.59 Euros were inadequate. These plaintiffs had unsuccessfully brought proceedings before the Social Court and Higher Social Court. The Federal Social Court considered their case on appeal. In the final case, children whose family received 716.88 Euro per month in benefits also challenged this amount in proceedings that were ultimately brought to the Federal Social Court. Thus, the Higher Social Court of Hesse and Federal Social Court submitted questions to the FCC for a ruling on whether Hartz VI was constitutional.
The FCC held that Hartz IV failed to guarantee a subsistence minimum in line with human dignity as required under Article 1.1 (on the inviolability of human dignity and state duty to “respect and protect it”) and Article 20.1 (on Germany’s status as a “democratic and social federal state”) of the Basic Law. Benefits to secure one’s livelihood “serve[] both to ensure the physical side of the subsistence minimum and also to cover its social side, given that the standard benefit also includes to a justifiable degree relations with one’s surroundings and participation in cultural life.” The parliamentary legislature was obligated to give concrete form to this constitutional obligation by determining, based on social reality, the form and scope of benefits. However, the FCC held that under Hartz IV the benefit amounts had not been ascertained in a constitutional manner because the calculation deviated from the legislature’s statistical model “without a factual justification.” In essence, the Court concluded that the formula used to upgrade benefits over time was not rationally linked to the cost of living for persons living close to the subsidence line, while the formula used to fix child benefits lacked any methodological justification.
The Court ordered the legislature to enact new provisions by December 31, 2010, and in the interim to ensure that recipients’ recurrent special needs be provided for.
Subsequent to the Court’s judgment, the Bundestag reconsidered the level of the relevant benefits in line with the Court’s findings. This resulted in benefits for particular classes of welfare recipients being raised very slightly, along with the introduction of new allowances for particular classes of beneficiaries. The adequacy of these new benefit levels were subsequently also challenged, on the basis of a lack of consistency in how benefit levels were calculated. However, the FCC held in 2014 that the Bundestag’s revised approach was in line with the requirements of the Basic Law, emphasizing that the courts should only intervene where the legislature’s approach was clearly defective (BVerfG, 1 BvL, July 23 2014).
This is among the first interpretations by a constitutional court of the right to benefits. About 6.7 million people received benefits through Hartz IV, including approximately 1.7 million children. The judgment obligated the legislature to ensure that these recipients were guaranteed a minimum benefit amount in line with human dignity.
For their contributions to the summary, special thanks to ESCR-Net member: the Program on Human Rights and the Global Economy (PHRGE) at Northeastern University.