Bürgergeld: €500 Payment from ‘Sanktionsfrei’ Counts as Income, Court Rules

Munich – A Bavarian court has ruled that a €500 payment received by a Bürgergeld (citizen’s income) recipient from the association “Sanktionsfrei” (Sanctions-Free) must be counted as income, according to a statement released by the Bavarian Landessozialgericht (State Social Court) on Friday.

The ruling stems from a case where the claimant had submitted a receipt for the €500 payment, received in July 2024, as part of their application for Bürgergeld. While the Jobcenter initially approved the Bürgergeld from April 2024 to March 2025, the court determined the payment should be considered “bedarfsmindernd” – reducing the amount of benefits due – as it was deemed the claimant could reasonably employ the funds to cover their living expenses.

The claimant had argued the payment should not be deducted, asserting it was a loan. However, the court found against this claim after “Sanktionsfrei” e.V. Informed the court that the payment was intended as a temporary bridge loan to cover expenses while the claimant awaited their initial Bürgergeld disbursement. According to a press release from DATEV Magazin, the association stated there was no formal loan agreement in place.

The court’s decision, issued on July 2, 2025 (case number S 3 AS 68/25) and now legally binding, hinged on the lack of a legally enforceable repayment obligation. The court reasoned that, without such an obligation, the payment constituted income as defined under § 11 Abs. 1 SGB II (Social Code II), which covers financial assistance for jobseekers. The Social Court of Augsburg issued a similar press release on March 27, 2026, confirming the ruling.

The ruling clarifies that payments made by organizations like “Sanktionsfrei” are not automatically exempt from income calculations for Bürgergeld recipients. The court emphasized that to be considered a loan and therefore excluded from income calculations, a payment must be subject to a clear and enforceable repayment agreement, mirroring standard legal definitions of debt.