Material need benefit

What it means

The material need benefit is state assistance for households whose income falls below the subsistence minimum and who cannot raise it through their own work, assets or by claiming entitlements such as maintenance or a pension. It is the last safety net of the social system.

It is paid by the labour office where the applicant lives. The amount depends on the household's make-up, meaning the number of adults and children, and is topped up by allowances such as the housing allowance or the protective or activation allowance.

Unlike the unemployment benefit, which is an insurance benefit based on past contributions, the material need benefit is non-contributory. Entitlement is assessed on the whole household's current income and assets, not on years worked.

How it works in practice

Applicants must prove the income of all household members, and the office also checks assets such as savings or a car. Some income is disregarded in the assessment, such as part of earnings from work, to encourage people to work even at low wages.

The activation allowance can go to someone who is improving their qualifications or doing small municipal services or volunteering. The protective allowance is for people who cannot work because of health, age or caring for a small child.

For employers it matters that earnings reduce the benefit only partly, so taking a job usually pays off for people in material need. For deductions from wages, such as under enforcement, the protected amount is derived from the subsistence minimum.

What to watch out for

The benefit is not granted automatically; it must be applied for, and changes in income or household make-up must be reported within eight days. An unreported change can lead to repayment of amounts paid without entitlement or to the benefit being stopped.

The rules change often, and subsistence minimum amounts are uprated every year on 1 July. For the exact amount and conditions, it is better to check current information with the labour office than to rely on older sources.