You can apply for a loan from the Job Center in Germany to avoid emergency situations in the household that affect your livelihood, such as breakdown of household appliances or utilities, or when a family member is exposed, but the application must be for a necessary and urgent need that cannot be deferred and relates to a necessary need not covered by the costs of basic life and cannot be covered by the minimum benefits. The applicant (or group of needs) should not have any assets that can be converted to cover this need.
You should also try to find solutions or other options to cover this need, such as buying used equipment, before resorting to requesting a loan from the Job Center in Germany.
The loan is granted without interest and fees by the Job Center only if there are no assets that can be converted to cover this need, and when all other options to cover this need have been exhausted, and the request is urgent and cannot be postponed and cannot be covered by the minimum benefits. In addition, the Job Center may provide material services instead of the loan.
It should be noted that the rental guarantee is also provided in the form of a loan. However, this does not constitute the provision of different material services under Section 24 of Social Security Act No. 2, but constitutes housing and heating costs or the costs of providing housing and heating in accordance with Section 6 of Article 22 of Social Security Act No. 2.
Cases of obtaining a loan from the Job Center in Germany
Emergency situations arise suddenly when household appliances such as refrigerators or washing machines are damaged and need repair or purchase of a new device, or when housing is damaged due to natural disasters and accidents, or when the family is exposed to emergency health conditions requiring additional costs. Emergency situations may also include sudden loss of job or salary reduction or increased emergency spending.
Processing time for Job Center loan application
The Job Center, pursuant to German §88 SGG, has up to 6 months to process the application after it is submitted. In the case of a loan application, the needy finds himself in an emergency situation, making processing necessary within a few days.
Advice: The responsible employee should be informed of the emergency situation to avoid delaying processing.
Unfortunately, the needy depends on the Job Center employee, as a lawsuit for inactivity can only be filed against the center if the processing time exceeds 6 months.
Repaying the Job Center loan
The loan of citizens is repaid from the monthly share of the individual or family members entitled to support, who were approved a loan. Additional expenses and accommodation costs may not be deducted by way of compensation.
Section 42a Abs. 2 SGB II legally regulates the repayment of the loan and deviations in this regard are not permitted, as 10% (5% from July 1, 2023) is automatically deducted from the individual’s monthly share, as long as the needy continues to receive support from the Job Center, and this process continues until the loan is fully repaid.
The deduction is made from the month following the month of disbursement. For example, if the loan was disbursed on March 10, 2023, 10% (5% from July 1, 2023) will be deducted from the needy’s share of the citizens’ program starting April 1, 2023.
No compensation allowed in case of sanctions
The deduction of 10% or 5% from July 1, 2023 under Section 43 Abs. 3 SGB II is excluded when sanctions have been imposed on the needy for violating their duties by 30% of the monthly share under Section 31b Abs. 1 S. 1 SGB II. If the sanction is less than 30%, only the difference between the sanction and 30% of the monthly share may be deducted.
Several loans from the Job Center
The needy can take out several loans from the Job Center. 10% will be deducted from the monthly share to repay all loans. The higher deduction is illegal (according to the technical agency’s instructions according to §42a SGB II, 3.1, point 2, found here).
Obligation to repay Job Center loans
All persons who have signed a loan agreement with the Job Center are responsible for repaying the loan (§42a, Abs. 1 SGB II). These persons can be one individual or more family members. Until the loan is fully repaid, all beneficiaries of the loan are responsible for repayment.
Minors/minors are usually excluded from the repayment obligation. If they can be obligated to repay, they may only be resorted to secondarily and for their appropriate share (Technical Agency Instructions on §42a SGB II on Loans, 3.1, point 3).
The borrowers must comply with the repayment obligations agreed in the loan agreement. They should contact the Job Center in case of any difficulties in repayment or change in personal circumstances that may affect the ability to repay.
The Job Center may deduct the installment due from any other support received by the borrowers, such as social benefits or social security.
If the repayment obligations are not met, legal action may be taken against the borrower, using the legal means available to recover the amount due, including deductions from social benefits or social security or salary, or referring the case to court to compensate for the damage. These measures can lead to additional costs and delay the final repayment. Therefore, borrowers must comply with the repayment obligations agreed in the loan agreement and contact the Job Center in case of any difficulties in repayment.