Unemployment benefit

Unemployment benefit (Arbeitslosengeld) is intended to provide workers who lose their jobs a measure of social security. It is meant to replace a portion of the income lost by individuals during periods of unemployment. Unemployment benefit is an insurance benefit.

Entitlement to unemployment benefit is defined in the third Sozialgesetzbuch (Social Security Code, SGB III). The responsible funding authority is the Bundesagentur für Arbeit (Federal Employment Agency, BA) or the appropriate local Agentur für Arbeit.

Unemployed as defined by law is an individual who is currently not engaged in an employment relationship, who is actively seeking employment and who is available for placement by the Agentur für Arbeit. The exercise of gainful activity for periods of less than 15 hours per week does not disqualify a candidate from eligibility for unemployment benefit.

Unemployed persons are required to register in person as unemployed with the appropriate Agentur für Arbeit. Written or telephonic registration is not sufficient.  As a rule, the benefit is only paid to unemployed persons who can provide evidence of at least twelve months of employment subject to mandatory insurance. The required twelve months can be proven within a framework period of 30 months prior to the date of application for unemployment benefits.

The amount of unemployment benefit is calculated based on the average gross insured income earned by an unemployed individual during the year preceding eligibility for unemployment benefit and accounted for at the end of the employment period. Considering the payroll deductions ordinarily made for employees (for social security contributions and taxes), a net monthly benefit is calculated based on these gross earnings. According to tax law, unemployed persons with one child receive 67% of this net monthly benefit. Other unemployed individuals receive 60%.

The duration of eligibility for unemployment benefit depends on the length of insured employment within the last five years preceding registration as unemployed and the individual’s age as of the first day of eligibility.

Employees who fail to comply with insurance requirements without sufficient reason must expect to be blocked from eligibility for a period of one to twelve months. Entitlement to unemployment benefit is suspended during this period, and no benefits will be paid. Furthermore, the duration of entitlement is reduced by the duration of the suspension period.

Please note! Cross-border workers are not entitled to receive German Unemployment Benefit! Further information is provided under Cross-border workers. An unemployed person who has earned an entitlement to receive German unemployment benefits may continue to receive these benefits for the purpose of looking for work in a Member State of the EU for three to six months (transfer / export of benefits). The individual has a legal right to transfer of benefits for the first three months, after which a discretionary decision must be taken. The unemployed individual must apply for transfer of benefits before leaving the country. Those who meet the prerequisites for entitlement will be issued a copy of portable document PD U2. If the unemployed individual registers as seeking employment with the appropriate agency in the country in which he or she is seeking work, a certain amount of unemployment benefit will be approved for a certain period of time. While receiving benefits for the purpose of seeking employment abroad, unemployed persons remain insured by their current health insurer. In order to receive benefits in kind (e.g. medical treatment, medications, hospital treatment), an unemployed individual (and his/her family members) must have a European Health Insurance Card.

Further information on the topic of unemployment compensation is provided at: Agentur für Arbeit