Whether due to redundancy or your work contract not being renewed, anyone can lose their job. Thankfully, the German federal government offers unemployment benefits to anyone without work.

There are two types of unemployment benefit in Germany: unemployment benefit I and unemployment benefit II (Arbeitslosengeld I and Arbeitslosengeld II). Which one you receive depends on whether you have made contributions to statutory unemployment insurance, and how long you have been unemployed for.  

Unemployment benefit I (Arbeitslosengeld I)

If you are an unemployed worker who has previously been making regular contributions to the German social security system, you may be eligible for unemployment benefit I. This provision is offered by the Federal Employment Agency (Bundesagentur für Arbeit) to cover you while you look for a job. The amount you receive, and the duration, depends on how long you have been contributing and the salary you received before you became unemployed.

Unemployment benefit I requirements

In order to qualify for unemployment benefit I, you must fulfil certain criteria:

• You are unemployed.
• You have registered as unemployed at your local employment office (Arbeitsamt).
• You have made at least 12 months’ worth of unemployment insurance contributions within the last two years (exceptions are made for any time taken out to raise children or due to illness).
• You are an EU, EEA or Swiss citizen, or you hold a valid settlement permit or temporary residence permit that entitles you to work in Germany.

If you do not fulfil these requirements, you may be able to apply for unemployment benefit II (see below).

How much unemployment benefit I will I get?

The amount of benefit you receive is based on your average weekly pay in the 12 months before you became unemployed (known as the “assessment period”). Your benefit will be 60% of your previous average wage (or 67% if you have children), up to a maximum of 6.500 euros per month in West Germany and 5.800 euros in East Germany.

Your benefit payments will then be subject to taxes and social security contributions, just like a regular wage. These will automatically be taken from your benefit by the employment office before it is transferred to your bank account at the end of each month. This includes deductions for:

• Statutory health insurance (7,3-8,2% of your benefit)
• Pension insurance (9,45%)
• Unemployment insurance (1,5%)
• Long-term care insurance (1,025%)
• Income tax
• Solidarity surcharge

How long can I claim unemployment benefit I for?

The amount of time for which you are entitled to receive unemployment benefit I depends on your age and how long you have been in employment and contributing to unemployment insurance before you became unemployed:

Note that if you voluntarily leave your job (i.e. if you quit), the Employment Agency is entitled to refuse to grant you unemployment benefit I payments for three months after your resignation date. If you have used up your entitlement to unemployment benefit I and you haven’t yet found a job, you will need to apply for unemployment benefit II (see below).

How to apply for unemployment benefit I

If you find yourself unemployed and wish to apply for unemployment benefit, you should take the following steps as soon as possible to ensure there is no delay in your payments.

1. Register yourself as a job-seeker

If you know in advance that you are going to be made redundant, register yourself at least three months before the end of your employment contract. If you do not have a notice period, or you become unexpectedly unemployed, you need to register within three days of finding out. This can be done online on the Federal Employment Agency’s website. Alternatively, you can call their free hotline on 0800 4 555500 or register in person.

2. Register in person

On your first day without work, at the latest, you need to register in person as unemployed at your local employment office. You will need to bring:

• Your ID card or passport (not a driving licence)
• Your certificate of registration
• Your visa or residence permit (if applicable)
• Your dismissal / redundancy notice or an employment contract
• Your CV

3. Fill out an Application for Unemployment Benefit form

You can get this form from the employment office; alternatively, it is available to download, fill out and submit online. Note that the form is only available in German. At this stage, you can also work out how much unemployment benefit you are likely to receive.

You will receive a letter of confirmation in the post, usually within two weeks. You will also probably be invited to attend meetings with a counsellor at the employment agency, where you will be expected to demonstrate the efforts you have made to find a job. Note that if you turn down job offers or any training / further education made available to you, your benefits payments can be reduced or stopped altogether.

Unemployment benefit II

If you are not eligible for unemployment benefit I, or if you cannot ensure your subsistence adequately from all your income or assets, you can apply for a basic subsistence benefit, unemployment benefit II (Arbeitlosengeld II, often colloquially referred to as Hartz Vier, after the head of the committee whose recommendations in 2002 caused a restructuring of unemployment benefits in Germany). This benefit is also sometimes given as an income supplement for low-earners.

Unemployment benefit II requirements

You are considered entitled to receive unemployment benefit II if you meet the following conditions:

• You are aged between 15 and the statutory retirement age.
• You are able to work at least three hours a day under “normal conditions”.
• You are unable to meet your own necessary living expenses or those of members in your household, either by working or with help from others.
• You are an EU, EEA or Swiss citizen, or you hold a valid settlement permit or residence permit that entitles you to work in Germany.

You must also be prepared to take part in “integration” measures designed to ensure your return to the workplace. This might include vocational training, further education or work opportunities. If you reject an offer of employment or a place on a training course, your unemployment benefit might be reduced or stopped altogether.

If you are not capable of earning (e.g. due to illness or incapacity) but live in a joint household with someone who is entitled to unemployment benefit II, you will receive social benefit (Sozialgeld). Both benefits are essentially the same in their basic components.

Duration and value of unemployment benefit II

Unemployment benefit is provided by your local job centre (Jobcenter) as a flat cash benefit, intended to secure basic subsistence. The benefit is paid monthly, in advance, and you can usually receive it for 12 months before a re-assessment is necessary. The exact amount you will receive is dependent on your income, assets and family situation.

Individuals receive unemployment benefit II in the form of a “basic needs rate” plus assistance with any additional needs, including accommodation and heating. The standard basic needs rates vary according to age:

In addition to standard basic needs rates, children and young adults are also eligible for various types of education and participation assistance, e.g. for school trips or supplies. To reduce reliance on unemployment benefit II, parents can also apply for the supplementary child allowance (Kinderzuschlag).

Additional support is also provided for:

• Pregnant women
• Single parents, according to the age and number of children
• Anyone with a disability who is capable of working
• For food, in cases of special dietary needs
• For water heating, where necessary
• Housing costs (if you receive unemployment benefit II for accommodation expenditure, you cannot apply for housing benefit)

How to apply for unemployment benefit II

Unemployment benefit II is intended as a “subordinate benefit”, meaning that it is only given when all other possible benefits have been paid out. Before you apply, you will be expected to have already applied for any other social security or assistance benefits you might be eligible for, including:

• Child benefit or child allowance
• (Reduced) early retirement pension
• Sickness benefit
• Housing benefit
• Maternity benefit
• Parental allowance

If you have exhausted all the above options and you still cannot meet your own basic living expenses, you may apply for unemployment benefit II by taking the following steps:

1. Register at your local job centre

At this first appointment at your local job centre, you will discuss your personal situation with the advisor. You will need to bring:

• Your ID card or passport (not a driving licence)
• Your visa or residence permit (if applicable)
• Your social security ID (Sozialversicherungsausweis)

2. Fill out an Application for Unemployment Benefit II form

You will receive all the forms you need at your initial appointment; you can also download the necessary forms from the Federal Employment Agency’s website. The job centre publishes advice on completing this form in various languages, including English. Staff members will also be able to advise you if you have any difficulties.

3. Submit your documents to the job centre

As well as your completed application form, you will need to supply documents that prove your case. This varies according to your personal situation, but will usually include:

• Bank statements from the last six months
• Your rental contract
• Proof of living costs (i.e. bills for utilities)
• Details of your income and assets

Remember also to bring a valid form of ID to all of your job centre appointments.

Your case will then be considered; if you are eligible to receive the benefit you will receive a notification with a schedule of payments in the post. You will also be informed of any further steps you need to take, such as attending appointments, applying for jobs, or undertaking training.

Start-up grants for unemployed workers

The Federal Employment Agency also offers a start-up grant to those who wish to start their own business as a way out of unemployment. If you're thinking about starting up your own business or becoming a freelancer, there are also a number of training and coaching programmes available for new entrepreneurs.