A comparison of living allowance and basic income support: what makes sense for you?
Here we provide an initial orientation on living allowances and basic income support in Germany. People on low incomes can receive financial support from the state. But which contribution is suitable for whom? In the following, we explain what options are available, what needs to be fulfilled and how much the support can amount to.
In Germany, living allowance and basic income support in old age or in the event of reduced earning capacity provide financial support to people on low incomes.
Living allowance is a subsidy towards housing costs, while basic income support in old age or in the event of reduced earning capacity covers all living expenses.
Eligibility depends on factors such as income, assets and household size.
Rule of thumb: If your pension is less than £1,062 (exactly your standard needs), you are more likely to receive basic income support in old age, otherwise living allowance
This blog post compares both benefits and answers frequently asked questions.
With us, you can submit your application conveniently.
Start application!Living allowance and basic income support are two important parts of the German social security system. They help people on low incomes. Living allowance provides a subsidy for housing costs. Basic income support covers all living expenses if, for example, your pension is not enough or you are no longer able to work. Both aim to enable people to live a dignified life in Germany. However, there are differences in the eligibility requirements and benefits.
The following sections will explain these two benefits in more detail and compare them with each other.
Living allowance is a social benefit in Germany. It helps people on low incomes to pay their rent. It is a subsidy towards rent provided by the state. Living allowance ensures that people on low incomes are not overly burdened by housing costs. This leaves enough money for other important things in life.
How much living allowance you receive depends on various factors. These include the amount of rent, the number of people in your household and their income. Your household mainly includes family members and partners with whom you live.
Living allowance is available upon application and does not have to be repaid. It is normally granted for one or more years. The 2023 living allowance reform expanded the scope of living allowance. As a result, more people can now apply for this social benefit. The income limits have been raised and more people are now entitled to living allowance.
People who are unable to support themselves receive different benefits from the state depending on their life situation: Those who are still able to work receive citizens' allowance. However, those who are permanently unable to work – for example due to illness or age – can apply for basic income support in old age or in the event of reduced earning capacity.
Basic income support in old age is available for people who have reached the statutory retirement age, i.e. who are already in retirement, and whose income and assets are not sufficient to cover their living expenses. As a rule of thumb, if your income from your pension is less than £1,062, you will usually receive basic income support in old age.
Basic security benefits for reduced earning capacity are intended for people who are permanently unable to work and also do not have sufficient means of their own. This is the case if a doctor certifies that you are unable to work less than 3 hours a day. If the reduction in earning capacity is only temporary and not permanent, you can still apply for so-called ‘help with living expenses’.
Just like citizens' allowance, basic security benefits cover the monthly standard rate for daily needs such as food, clothing and hygiene. In addition, reasonable costs for accommodation and heating are covered. Contributions to health and care insurance are also paid.
The aim of basic security benefits is to secure the minimum subsistence level – in other words, to enable people to live in dignity even if they no longer have their own income.
The limit for living allowance depends on the number of household members, the amount of rent and the rent level. The rent level indicates how high rents are in the region. If the monthly net income of the household is above the standard requirement but below the income limit for the respective situation, you are entitled to living allowance. Income includes money from work, capital or rental income. Pensions, pensions and social benefits are also included. In addition, certain allowances mean that part of the income is not taken into account.
Living allowance can be applied for at your local living allowances office.
Unfortunately, the calculation is very complex. We therefore recommend using a living allowance calculator. Click here to access our living allowance calculator.
To receive basic income support in old age or in the event of reduced earning capacity, you must have reached the standard retirement age or have a permanent full reduction in earning capacity. In addition, applicants must not be able to support themselves.
The social welfare office will check whether all the necessary requirements are met during the application process. If the applicant's income and assets are below the standard needs, basic security benefits are usually approved.
Basic security benefits can be applied for at your local social welfare office.
Living allowance and basic security benefits are both important for social security in Germany. Living allowance helps by reducing housing costs and thus easing the burden on the household budget. Basic security benefits ensure that all basic living expenses are covered.
Basic security benefits consist of various components. The standard rate covers general living expenses. In addition, those entitled also receive an appropriate amount of money for accommodation and heating.
Contributions to health and care insurance are also paid. Special needs, such as those arising from disability, are also taken into account in basic security. However, there are some benefits that are not taken into account, such as the basic pension supplement and care allowance.
It is not possible to receive living allowance and basic income support at the same time. If someone receives basic income support, they are not entitled to living allowance and vis versa. This is because living allowance shall contribute to living costs, which are already covered in basic income support.
Income plays a role in living allowances and basic income support. If your income is higher, your entitlement to these benefits will be reduced. However, there are also allowances. This means that parts of your income are not taken into account.
The best benefit for pensioners depends on how high their pension is and what conditions apply. If the pension is not enough to live on, basic income support for the elderly is the better option. If someone has a pension that does not cover the cost of rent, it is better to apply for living allowance.
The processing time for applications for living allowance or basic income support can vary greatly depending on the city. Normally, processing takes several weeks to months. It is therefore advisable to submit the application as early as possible. The benefit is always paid retroactively from the date of application.
With us, you can submit your application conveniently.
Start application!Living allowance is primarily income-dependent. Basic income support for the elderly or those with reduced earning capacity is intended to ensure that basic needs, including housing, are covered. It is advisable to determine your own standard needs in order to establish whether your income is above (in which case you are likely to receive living allowance) or below (in which case you are more likely to receive basic income support). Regardless of what you apply for, a discussion with the relevant authority can make the application process easier.
Still need to apply for living allowance? With our living allowance calculator from LeistungsLotse, you can quickly and easily check whether and how much living allowance you are entitled to. Check now!
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