This is because of what we would call “Beamtendeutsch”, “Behördendeutsch” or “Bürokratendeutsch”, freely translated as “the German of the bureaucracy”.
The word itself is artificial and not commonly used like the majority of these long compound words as they are the product of governmental agencies and various administration. And they love their compound words together with a certain writing style that renders their texts difficult to comprehend to many people who didn't enjoy any form of higher education.
Understanding common German is one thing, understanding the German that is used by the administration and in matters of administrative law is a completely different story.
In a certain sense, it is similar to the phenomenon that is denoted in English as legalese.
