Unemployment Benefits in Germany + Bonus Info [2023]

by | Mar 30, 2022 | Work in Germany

Home 9 Work in Germany 9 Unemployment Benefits in Germany + Bonus Info [2023]

Losing a job is quite depressing and stressful. However, the German Federal Government has taken measures to keep unemployed people away from stress. In Germany, the government provides unemployment benefits to the people who are not employed. What are these Unemployment Benefits? How can you apply for unemployment benefits? This is exactly what you are going to learn in this guide. Continue reading this article to know everything about unemployment benefits in Germany.

Unemployment Benefits For EU and Non-EU Citizens

If you are an EU citizen, you can claim the unemployment benefits if you meet the eligibility criteria mentioned below. EU citizenship gives you the right to work and live in Germany.

In case you are an EU citizen who gets unemployed in his home country, you can shift your unemployment rights from your country to Germany. For this transfer, you can get all the necessary information from the official website of the EU. 

If you are a non-EU citizen, then your residence status will determine your right to apply for unemployment benefits. If you have a permanent residence or work permit in Germany, you can apply for the benefits from the social security system of Germany if meeting all the requirements.

Unemployment Benefits in Germany-Types

In Germany, unemployment benefits are categorized into two main types.

  1. Unemployment Benefit I [Arbeitslosengeld I]
  2. Unemployment Benefit II [Arbeitslosengeld II]
  3. Funded Educational Training

The category from which you can receive the unemployment benefits depends upon different factors i.e., for which period you have been unemployed, whether you have contributed to unemployment insurance or not etc.

In case you don’t fulfill the requirements of Unemployment Benefit I and II, you can get the funded educational training which can be regarded as type 3 of unemployment benefits.

1.) Unemployment Benefit I [Arbeitslosengeld I or ALG I]

If you have made regular contributions to the German Social Security System when you were employed, then this Unemployment Benefit I is best for you.

This contribution is usually mandatory for the employees having a good job in Germany. In case you are self-employed, you can contribute to the German Social Security System as a volunteer.

General eligibility criteria for ALG I

There are certain eligibility criteria to receive Unemployment Benefit I. Following are the requirements that you need to fulfill if you want to qualify for Arbeitslosengeld I.

Status: You are not employed and looking for a job that ensures at least 15 working hours per week.

Registration: You are done with your unemployment registration at the local employment office.

Citizenship: To receive Unemployment Benefit I, you should have a German work visa or permit. Or you should have the citizenship of EEA, EU, or Switzerland.

Contribution: You have contributed to unemployment insurance for at least 12 months (exceptions included in case you were ill or doing military service).

 

How much money you get in Arbeitlosengeld I or ALG II?

The amount you receive from Unemployment Benefit I depends on your previous salary in the assessment period.  The assessment period constitutes the 12 months of your employment before you got unemployed. Your previous average wage in the assessment period will be calculated and you will receive 60 % of this wage. In case you have children, you will get 67% of your previous average wage.

The maximum receivable limit is different for East and West Germany. In West Germany, you can receive a maximum of 7050 euros each month. For East Germany, the maximum limit is 6750 euros per month.

Do I need to pay taxes on unemployment benefits?

Yes, the government will consider your unemployment benefit as your regular wage and therefore, deductions will be made. Once your benefit payment is calculated, the government will deduct the social security contribution and taxes from it. After this deduction, this payment will be sent to your bank account. Following are the deductions that will take place before you receive the final amount.

 

Social security contributions % Of benefit deducted
Pension Insurance 9.35%
Long-term care insurance 1.525%
Income tax
Unemployment insurance 1.2%
Statutory health insurance 7.3% – 8.2%

When Unemployment benefit is suspended for 3 months ? [Sperrzeit]

Unemployment Benefit I can be suspended for 3 months in any of the following cases. This time is also known as Sperrzeit like Blocking Period.

Resign: If you quit your job i.e., you resign from the job.

Fired: If you are fired because of any wrongdoing or misconduct.

Severance pays: If you have received the severance pay by terminating your job.

No effort: If you are not searching for a job i.e., you are unable to prove your efforts for finding a job.

Rejecting job offers: If you have rejected a good job offer.

Registration: If you are not done with your registration as a job seeker at the local employment office.

How to Apply for Unemployment Benefit II or ALG II

Follow these steps to apply for the Unemployment Benefits 1 or Arbeitslosengeld I

5 Steps for your Unemployment Benefit 1 application

Step 1: Registration as a job seeker

Go to the website of the Federal Employment Agency to register yourself as a job seeker. If you already know that you will be unemployed after 2 or 3 months (in case your contract is coming to an end or you have received a notice from your employer), it’s better to register yourself as a job seeker before the end of your employment. Doing so will give you dual benefits. Firstly, the agency will help you find a new job. Secondly, you will start receiving unemployment benefits at the very start of your unemployment period. 

Step 2: Registration as unemployed

Go to the local employment office and register yourself unemployed. Even if you have followed step 1 and registered as a job seeker, you still need to get yourself registered as unemployed to receive the benefit.

Take your ID card, registration certificate, and residence permit or visa with you while visiting the office. You can also do this online. However, you will have to provide your digital identity and the date since you have been unemployed.

If you want to receive the full amount of benefit, you must register as unemployed on the very first day of your unemployment.

Step 3: Meeting appointment with the consultant

Since you have registered yourself as unemployed and a job seeker, the employment agency may book an appointment of yours with your personal consultant. In this meeting, the consultant will discuss the job opportunities with you and will assess where you stand in the highly competitive job market. Moreover, he will ask you to describe the efforts you are doing to seek a job. This is to make sure that you are unemployed by force not by choice.

Step 4: Filling of application form

If you have followed the above steps, then it’s time to apply for the unemployment benefit I by simply filling out the application form. To get the application form, you can visit the official website of the Federal Employment Agency. If you need a hard copy of the form, contact the local office.

Step 5: Approval of application

Wait for the approval of your application. After the approval of your application, you will receive a confirmation after which your unemployment benefit will be provided to you at the end of each month.

How long will you receive ALG II?

The duration for which you receive this benefit depends on your age and the period for which you have been unemployed. Depending on your age, the duration varies after which you will have to apply for the second type of Unemployment Benefit if required.

The following table will give you details about the duration of Unemployment Benefit I.

No. of months you
contributed to the
unemployment insurance
fund
Age
(in years)
Duration of ALG1
(in months)
6 3
8 4
12 6
18 9
24 or more 12
30 or more 50 – 54 15
36 or more 55 – 57 18
48 or more More than 58 24

2.) Unemployment Benefit 2 [Arbeitslosengeld II / Hartz IV / ALG II]

If you find yourself unable to meet the eligibility criteria of Unemployment Benefit I, you can apply for Arbeitslosengeld II. If you are a low-income earner, this unemployment benefit is best for you as this benefit is considered an income supplement.

General eligibility criteria for ALG II

You must be able to meet all the following requirements if you want to apply for Arbeitslosengeld II.

Working Capacity: Under normal circumstances, you can work a minimum of 3 hours per day.

Income: If you can’t fulfill your financial needs with your income or with the financial help of others.

Age: Your age is above 15 and below statutory retirement age.

Citizenship: To receive Unemployment Benefit I, you should have a German work visa or permit. Or you should have the citizenship of EEA, EU, or Switzerland.

How much benefit you get in Arbeitlosengeld II or ALG II?

You will get Arbeitslosengeld II as monthly cash to fulfill your basic needs. The basic needs covered under Arbeitslosengeld II are health insurance, support for children and adults, and additional needs like heating and accommodation.

The exact amount you will receive will depend on multiple factors like your current income, assets, and family circumstances.

The following table will give you an estimate of the rate of basic needs.

Status Age Value per month
Single or single parents More than 18 €449
Couples (married or partners) More than 18 €404 per person
Children Up to 6 years €285
Children From 6 years to 13 years €311
Children From 14 years to 17 years €376
Young people From 18 years to 24 years €360

How to Apply for Unemployment Benefit II or ALG II

The following steps will guide you on how you can apply for Unemployment Benefit II.

5 Steps for your Unemployment Benefit 2 Application

The following steps will guide you on how you can apply for Unemployment Benefit II.

Step 1: Applying for other Benefits in Germany before ALG II
Make sure that you have already applied for all other benefits you are eligible for i.e., Sickness benefit, Housing benefit, Maternity benefit, Parental allowance, etc. after applying for these funds, if you still need financial support, you can apply for
Unemployment Benefit II.

Step 2: Collecting Documents to Submit
Collect your necessary documents to apply. These documents include your visa or residence permit, social security, and Passport or ID card.

Step 3: Go to the Local Job Center
Pay a visit to the local job center for registration along with your gathered documents.

Step 4: Fill the Application (in German)
Take the application form and fill it out. However, the form is available only in German, and therefore, you may face some complications in filling out the form.

Step 5: Submit the Application
Submit the required additional documents along with the application form i.e., proof of your living costs, assets and income, bank statement, rent, and bank statements.

How long will you receive ALG II?

You will receive this benefit for a 12 months period. After one year, your reassessment will be required which means you will have to reapply by repeating the whole procedure.

 In case of self-employment or volatile income, you will receive this benefit for 6 months.

3.) Funded Educational Training

Whether or not you are eligible for Unemployment Benefit I and II, you can apply for funded educational training in Germany if registered as a job seeker and unemployed. This funded educational training (Bildungsgutschein) is not your legal right and therefore its approval depends on your consultant at the job center.

Funded Educational Training- Courses covered

Under this funded educational training, different courses are covered i.e., German language course, boot camps for career changes, etc. However, most people are usually unaware of the types of courses offered. If you successfully get yourself registered, you can request the desired courses through your consultant.

Bonus information- Start-up grants

Thinking to start your own business? You can get start-up grants from the Federal Employment Agency. Even if you are not seeking unemployment benefits, still you can get start-up grants to become a businessman. Also, the agency offers free coaching and training programs for those who want to learn a new skill to grab employment opportunities or become a freelancer.

Conclusion

Germany offers unemployment benefits to unemployed people. To seek these benefits, all you need to do is to follow the correct procedure. Hope this guide helped you to achieve financial stability by applying for unemployment benefits.

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