Basic Rent vs. Total Rent in Rent Allowance Calculation
In the application or calculation of your rent allowance, the rent plays a crucial role. However, not every rent counts towards the allowance. The basic rent and the total rent are two different concepts that often cause confusion. Whether your allowance is calculated based on the basic rent or the total rent depends on your lease agreement and the rules of the Social Insurance Bank (SVB). In this article, we explain the difference, how the rent allowance is calculated, and what you can do if you think your allowance is too low.What is the difference between basic rent and total rent?
Basic rent is the base amount that you pay for the use of the dwelling, excluding service charges, administration costs, water, gas, electricity, or other ancillary costs. This is the amount stated in your lease agreement as rent without extras. Total rent, on the other hand, is the total amount that you pay, including all ancillary costs such as service charges, water, gas, electricity, internet, or other mandatory costs that fall under the lease agreement. This is also called the gross rent. The SVB uses these two concepts to determine which rent counts for the calculation of the rent allowance. In most cases, the basic rent is used, but there are exceptions.Legal Basis: Which Rent Counts for the Rent Allowance?
The rules for the calculation of the rent allowance are laid down in the Work and Assistance Act (Wwb) and the associated General Act on Special Assistance (Awbb). In addition, there are specific rules for the Social Insurance Bank (SVB), which is responsible for the implementation of the rent allowance. According to the SVB, the following applies:- The basic rent counts for the rent allowance, unless the lease agreement states otherwise.
- If your lease agreement considers service charges or other ancillary costs as part of the rent, the total rent may be used for the allowance calculation.
- Since 2023, a rent threshold of € 741.66 (for a one-person household) has been set. This threshold applies to the basic rent. If your rent exceeds this threshold, you may be entitled to a lower allowance or no allowance.
Practical Examples: Basic vs. Total Rent
To better understand the difference between basic and total rent, here are two practical examples.Example 1: Rent Without Ancillary Costs
Situation: You rent an apartment for € 800 per month. Your lease agreement only mentions the rent, without service charges or other ancillary costs. Basic rent: € 800 Total rent: € 800 (no extra costs) Rent allowance calculation: The SVB uses the basic rent of € 800. If your income is below the threshold, you may be entitled to an allowance. However, because your rent exceeds the rent threshold of € 741.66, you may receive no allowance or a reduced allowance.Example 2: Rent With Ancillary Costs
Situation: You rent an apartment for € 700 per month, but your lease agreement also includes service charges of € 50 and water costs of € 30. You therefore pay a total of € 780 per month.| Concept | Amount | Remark |
|---|---|---|
| Basic rent | € 700 | This is the amount stated in the lease agreement as rent. |
| Service charges | € 50 | This is an ancillary cost that falls under the lease agreement. |
| Water costs | € 30 | This is a mandatory cost that often falls under the lease agreement. |