The Social Court of Hamburg has ruled that rigid cash limits on the payment card for refugees are not suitable to meet the additional needs of certain groups, such as pregnant women or families with young children. According to the court, the social authority responsible for the card must consider the personal living circumstances of the applicants, which rigid cash limits fail to accommodate.

Since February, Hamburg has implemented a payment card for asylum seekers. In a specific expedited case, a pregnant asylum seeker with a two-year-old child had received a budget of 110 euros in cash through the payment card. She demanded either an increase in the cash allowance or the deposit of the additional needs into another account. The Social Court provisionally ruled in her favor, increasing her cash allowance to 270 euros (decision of 18.07.2024 - S 7 AY 410/24 ER, not legally binding).

The court deemed the stipulation of a flat cash amount for the payment card unlawful because it does not account for personal living circumstances. However, the court spokesperson emphasized that the payment card itself is not objectionable, does not violate human dignity, and aligns with the societal trend towards card payments. "That is already a very important message," the spokesperson said.

Also read: Germany's payment card scheme for asylum-seekers

Is Germany turning away from cash?

Under the scheme, asylum seekers receive part of their state benefits as credit on the payment card instead of cash.

The payment card, approved by the Federal Council and previously introduced in some states like Hamburg, aims to distribute part of the state benefits as credit, reducing the amount given as cash to better manage and monitor the use of funds. It can be used in shops that accept credit cards but may have restrictions based on local rules, including postcode limitations and a ban on online payments.

Hamburg's "SocialCard" is the least restrictive, allowing widespread use and limited cash withdrawals.

However, in a country that largely still relies on cash payments this can be very limiting. Despite a major shift to card payments after the COVID-19 pandemic, many Germans still largely favor cash payments.

Critics have argued that the payment cards are discriminatory and hinder integration, with some advocating for exceptions for long-term asylum-seekers or those in training or education. Migration researchers indicate that social benefits do not significantly influence migration patterns, as most migrants send money home only when they have sufficient earnings from employment.

Also read: Germany: Hamburg begins issuing Visa cash cards for refugees

An isolated case?

The court spokesperson noted that this decision is likely to be an isolated case without broader implications, as it was made in expedited proceedings and is not yet legally binding. The social authority in Hamburg stated that the decision does not alter the current model, which will remain in place.

The spokesperson noted that neither the legality nor the system of the Hamburg payment card is being questioned and that the "fixed cash limit has not been declared inherently unlawful by the court". They are considering an appeal, with a deadline until mid-August.

While the court ruled against rigid cash limits due to their failure to consider individual circumstances, the payment card system itself remains valid and in line with contemporary payment trends. Although the decision does not alter the existing model in Hamburg, it does highlight the need for flexibility in meeting the diverse needs of refugees.

Also read: How Germany seeks to get tough on asylum seekers

With dpa