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German unemployment insurance

Unemployment insurance is mandatory for all employees in Germany. As of 2013 contributions are 3.0% of gross monthly salary up to €5,600. This is split equally between employer and employee.

What is unemployment insurance?

Unemployment benefits will be paid if you are unemployed and have worked and paid contributions for at least 12 months in the last two years. To receive these unemployment benefits, you must register at your local employment office (Arbeitsamt). You should register as soon as you become unemployed, as you will only get paid from the registration date and delays can lead to potential further penalties.

Benefits are around 60% of your previous net salary and are paid directly into your bank account. If you have children, this percentage rises to approximately 67%. The length of time you will receive benefits depends on the length of your last employment and your age. Benefits are restricted to one year for people up to 45 years.

While receiving benefits, you must to report regularly to your employment office. You are also responsible for proving you are looking for work if requested, as is the case in the UK.

Be aware that unemployment insurance is undergoing rapid changes as the government tries to keep costs under control. Rules and regulations are changing quickly and don’t usually go in the favour of the unemployed!

The Bundesanstalt für Arbeit (German Federal Employment Office) has a number of employment promotion schemes for employers and employees alike and endeavours to place as many job seekers as possible in employment.

Lost a job, retrenched? Find out where to go in order to register for unemployment benefits...

New arrivals to Germany do not normally qualify for any unemployment benefit, simply because they will not have made the necessary contributions in the required time threshold or have worked the required number of hours within the defined period.

However, some EU nationals may be able to claim benefit. They must have been in work in their previous country of residence for a minimum of 360 days over the past three years and paid contributions into the relevant schemes. They must have worked in Germany for at least one day.

Claiming unemployment benefit explained

Basic security benefits for jobseekers (Grundsicherung für Arbeitssuchende) provide a single set of benefits for those who can work but are unemployed or do not earn enough to cover basic living expenses. The Federal Employment Agency and local authorities handle benefits.

Qualification is usually dependent upon a contract of employment having been in force and payments having been made into the necessary fund. The minimum qualifying period is 12 months. The self-employed do not qualify and those who resign must wait three months before receiving benefits. Benefits are paid to those aged between 15 and 64 and are paid monthly in advance for periods of six months at a time.

There are two types of unemployment benefit:

  • Unemployment Benefit 1 (Arbeitslosengeld I), full employment benefit paid as a percentage of previous earnings
  • Unemployment Benefit 2 (Arbeitslosengeld II) a subsistence allowance

Full employment benefit (Arbeitslosengeld I)

If the claimant has no children, they receive 60% of their previous net earnings. If caring for children under 18, this rises to 67%. This benefit is payable for 90 to 360 days, depending on the length of previously insured employment and age. A full year's unemployment benefit is received if the person has worked for two calendar years or more (18 months for those aged over 55).

Subsistence allowance (Arbeitslosengeld II)

This allowance is lower than the ordinary unemployment benefit and is payable when the claimant cannot receive full benefit or their period of benefit has come to an end, but they are still fit to work and registered as unemployed. Whether or not a person can claim for Arbeitslosengeld II will depend on savings, spouse's earnings and life insurance. A set amount is paid for those requiring social assistance (approx. €350 per month). Claimants must attend job-training courses, and be ready to step into any job offered them by the Arbeitsamt, even a very low paid one. Exceptions to this rule are occasionally allowed on mental, physical or psychological grounds or in cases where pay rates are deemed immorally low.

Exactly how much social assistance an individual receives depends on several factors, such as number and age of children as well as marital status.

Arbeitsagentur provides more specific information about the amount of social assistance available to individuals

While receiving benefits, reports must be made regularly to the job centre. The centre can contact you at any time requesting proof of job searching activities (applications and responses from different companies). Anyone claiming unemployment benefit must not be absent from his or her usual place of residence for longer than three weeks in each year. These holidays must be agreed in advance with the unemployment office agent.

Note: As soon as redundancy or resignation is confirmed, the unemployment office need to know at least three months in advance so that they can process the unemployment benefit application in time for the period of unemployment. Where the time between the announcement of redundancy or resignation is less than three months, the unemployment office should be notified within three days of knowing the end date of your employment.

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