German courts issue rulings on social benefit eligibility

Recent rulings from German courts have clarified the criteria for social benefit eligibility regarding family loans and property assets.

The Administrative Court of Weimar ruled that loan agreements between parents and adult children may not qualify for housing allowance (Wohngeld) if they are deemed abusive. In a specific case, an applicant received monthly payments equivalent to child benefit, structured as a repayable loan to artificially lower reported income. The court emphasized that authorities must look beyond the contract title to determine if the arrangement is a genuine, economically viable loan.

Separately, the State Social Court of Niedersachsen-Bremen ruled that social welfare offices cannot automatically reject repair costs for self-occupied homes simply because the property is considered too large. The court stated that authorities must assess whether the property can realistically be liquidated within the relevant twelve-month approval period. If a sale or partial division is not feasible within that timeframe, the property's value cannot be treated as immediately available assets for determining social assistance needs.