Can you have death benefit insurance despite receiving social assistance?

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Lerato Khumalo

Are social assistance recipients allowed to deduct death benefit insurance with their own income? Whether this is possible depends on when it was completed.

Social assistance recipients with their own income can regularly deduct existing death benefit insurance from them. As long as the amount is appropriate, the social welfare office is not allowed to attach any difficult conditions to it, as the Federal Social Court (BSG) decided in Kassel.

However, according to another ruling, stricter requirements apply if the death benefit insurance is only to be taken out while you are currently receiving social assistance. (Af. B 8 SO 22/22 R and B 8 SO 19/22 R)

Many pensioners also receive social assistance benefits because their pension is not enough to live on. Your pension and, if applicable, other income will then be partially offset against your social assistance benefits. They are allowed to deduct certain insurance policies from their income, including death benefit insurance.

The plaintiff in the first case is a pensioner and took out death benefit insurance in 2015. In December 2016 she applied for supplementary social assistance for the first time. The Karlsruhe district complied, but did not take the death benefit insurance into account in the calculation. The daughter’s entitlement to benefits is not sufficient to earmark the funeral. In addition, the contributions are unreasonably high.

As the BSG decided, the social welfare office must take the death benefit insurance into account. The law does require sufficient earmarking for one’s own funeral. However, it is sufficient if a person like the daughter here is entitled to benefits and has to pay for the funeral. It doesn’t matter whether the person would probably have to rely on social assistance benefits to pay for the funeral without the insurance.

The contributions here are not excessive compared to other funeral insurance offered on the market. It is also harmless that double the insured sum is paid out in the event of an accidental death, as this would only increase the premiums insignificantly.

In contrast to death benefit insurance from the time before social assistance was received, according to another ruling, the social welfare office only has to take a new insurance into account if there is an understandable reason for taking it out, in particular a “proximity to the insured event”. This could be the case with old age or certain illnesses. The BSG left it open whether reaching retirement age is sufficient.