Socialcompensation law is based on the provisions set out in the Federal War Victims Relief Act (Bundesversorgungsgesetz), which was originally enacted to provide for WWII victims and their surviving dependants. As an underlying principle of victims' compensation, where appropriate the Act has also been applied for several decades to other groups of people who are entitled to claim under certain secondary legislation (e.g. victims of violent crime, people injured during military or civilian service, people who were imprisoned on the basis of an unlawful sentence under the SED regime (the regime of the Socialist Unity Party of the former German Democratic Republic), people with vaccine damage).

Victims' compensation and assistance is based on the type and degree of severity of the injury or illness and on the individual's actual needs, and comprises a number of different benefits. These include monetary benefits and payments in kind, such as pensions or assistance, physiotherapy, medical rehabilitation and welfare schemes. Designed to compensate for the additional expense arising from the injury or illness or paid on purely humanitarian grounds, the pensions paid to victims and their surviving dependants are paid irrespective of the individual's income.

Effective Jan. 1, 2024, social compensation law will be fundamentally reformed and, in addition to appropriate compensation, the focus will be on rapid assistance (trauma outpatient clinics, case management).