Unemployment benefits in Germany in 2021, 2020: the amount and types of benefits for the unemployed citizens and migrants
Here you will find an overview of the main financial unemployment benefits in Germany: Arbeitslosengeld I; Arbeitslosengeld II; Eingliederungszuschuss; Kurzarbeitergeld; Bildungsgutschein; Gründungszuschuss и Einstiegsgeld and learn about the amount and types of benefits and various financial subsidies for non-working citizens, the rules for obtaining these benefits, as well as links to official application forms for benefits, as well as laws and useful websites on the subject. At the bottom of the page you can share your experience about receiving benefits for the unemployed in Germany. General information on benefits in Germany, as well as on individual types of financial benefits, amounts and terms, can be found on the Amount and types of benefits in Germany page. Information on child benefits is also available on a separate page of the German child benefits website.
§ Types of unemployment benefits in Germany
The main types of unemployment benefits in Germany are Arbeitslosengeld I (ALG-I) and Arbeitslosengeld II (ALG-II). The difference between these types of benefits is that ALG-I is paid from the unemployment insurance fund, to which all working citizens make mandatory contributions, the amount of the benefit depends on the amount of a person’s salary that s/he received before beoming unemployed, and this type of benefit is paid for a limited time. ALG-II - this type of benefit is the subsistence minimum, which is received by non-working citizens, as well as those who work or already receive ALG-I, but the amount of these incomes is less than the subsistence minimum. This type of benefit was introduced in Germany as part of the Hartz IV reform.
In addition to these basic types of benefits, there are various subsidies and financial payments for non-working citizens, designed to improve their chances of getting a job or provide assistance in special cases. Details are described further on the page. In table 1 below you will find the types and amounts of basic unemployment benefits in Germany.
Table 1: Types of unemployment benefits and subventions in Germany
as of 2020
|Benefit name||Governing law||Benefit amount, in euros, per month||Duration of benefit|
|Unemployment benefit I, Arbeitslosengeld I||SGB-III||depending on average earnings in the last 12 months and other factors||up to 24 months, depending on the age and time of work|
|Unemployment benefit II, Arbeitslosengeld II||SGB-II, Hartz IV||from 345.00 to 432.00 € + additional payments |
Social security benefit amount in Germany
|not limited in time|
|Employers allowance for employment, Eingliederungszuschuss||SGB-III||up to 50% of wages (or more under a number of conditions)||up to 1 year (or more under a number of conditions)|
|Business start-up subventions for ALG-II recipients or those resuming employment, Einstiegsgeld||SGB-II||up to 50% of ALG-II allowance and more||up to 24 months|
|Business start-up subventions for ALG-I recipients, Gründungszuschuss||SGB-III||Stage I: ALG-I benefit + 300 euros |
Stage II: 300 euros
|Stage I: 6 months |
Stage II: 9 months
|Subemployment benefit, Kurzarbeitergeld||SGB-III||from 60% of the net salary||up to 21 months|
|Support for retraining, advanced training or vocational education, Bildungsgutschein||SGB-III||tuition||fees training period|
§ Unemployment benefit Arbeitslosengeld I
Requirements for receiving the unemployment benefit
The Arbeitslosengeld I unemployment benefit is paid to the citizens and persons possessing a permit to work in Germany who have lost their jobs or have been working less than 15 hours a week. In order to receive this type of benefit, it is necessary that in the last 30 months a person has worked for at least 12 months in the workplace, at which social insurance sums (Versicherungspflichtige Beschäftigung) have been charged from their salary. There may be exceptions to this rule under certain circumstances. In addition, in order to receive this type of benefit, the person has to personally come to the local Federal employment agency (Arbeitsagentur) and register as unemployed and looking for work.
However, if a person has independently quitted their job without a strong reason, the payment of unemployment benefits by the Federal employment agency may be suspended for up to 3 months (Sperrzeit). In addition, the law stipulates the time when a person who has lost their job has to register as a job seeker at the Federal employment agency. In particular, you need to register 3 months before the start of unemployment or within 3 days of receiving the information from the employer about the dismissal. Violation of these terms leads to the suspension of benefits payment. If the ALG-I benefit is stopped, the person can apply for the ALG-II benefit.
Thus, to obtain ALG-I in Germany, the following basic requirements have to be met:
- Register at the Federal employment agency as a job seeker (3 months before the onset of unemployment or within 3 days of receiving a notice of dismissal);
- personally come to the Federal employment agency and register as unemployed (before the start of unemployment or on the 1st day of unemployment);
- submit to the Federal employment agency the filled out application form and copies of the necessary documents;
- have no work or work no more than 15 hours a week;
- in the general case: during the 30 months prior to registration as unemployed, a person worked for at least 12 months at a workplace with a social insurance package (in some cases this rule may be altered).
Amount of unemployment benefits
The unemployment benefits amount calculation is regulated by law and depends on the following three factors: 1) the average salary for the last 12 months, 2) the tax class (tax bracket) of the income tax (see details on the German payroll tax page), 3) whether the person is a recipient of child benefit. The amount of the benefit is reduced during the benefit period.
During the period of receiving the ALG-I unemployment benefit, the person remains insured in the state pension insurance system, compulsory health insurance and insurance in case of need for care(nursing) insurance.
The table below shows examples of calculating the amount of unemployment benefits.
Table 2: Examples of calculating the ALG-I unemployment benefit in Germany as of 2020
|Average gross salary for the last 12 months||Child benefit recipient (Kindergeld)||Tax class, bracket||Amount of monthly allowance, in euros||Amount of monthly allowance, in US dollars *|
|1'000.00 €||Yes||I, IV||528.60||616.08|
To accurately calculate the ALG-I allowance, you can use the ALG-I calculator on the official website of the Federal employment agency.
Duration of unemployment benefits
Unemployment benefits are paid monthly for a maximum of 24 months. The exact duration of the benefit payments is calculated depending on the age and duration of work, employment before registration as the unemployed. The following table shows the timing of unemployment benefit payments.
Table 3: Duration of unemployment benefit payments
|Employment term before registration as the unemployed, in months||Age of the unemployed||Duration of receiving ALG-I, in months|
|30||from 50 years old on||15|
|36||from 55 years old on||18|
|48||from 58 years old on||24|
There are also additional rules governing the timing of receiving unemployment benefits in case of short-term employment. In any case, the labour exchange will calculate the amount and time period for receiving benefits in each specific situation.
Part-time(secondary) work while receiving unemployment benefits
While receiving unemployment benefits, a person can have a mini-job, work not full - time, not more than 15 hours a week. If a person earns up to 165 euros per month, this does not affect the amount of his/ her benefit. If a person earns more than 165 euros, the labour exchange will take into account their travel expenses to and from work/ commuting expenses, as well as some other types of expenses related to this work and the remaining amount will be deducted from the allowance.
For example, if a person receives ALG-I and additionally earns 300 euros, while incurring expenses in connection with this work (travel, etc.) in the amount of 30 euros, the deduction from the allowance will be calculated as follows: 300 - 165 - 30 = 105 euros. Thus, the amount of 105 euros will be deducted from ALG-I.
§ Unemployment benefit Arbeitslosengeld II (subsistence minimum)
This type of the unemployment benefit is paid as a living wage for people who are unemployed but are looking for work and have the opportunity to work. Pensioners, people with disabilities and other groups of persons who cannot work receive a living wage in the framework of other types of benefits (social assistance, basic allowance in old age and in case of disability). To get the ALG-II unemployment benefit, you have to go to the nearest employment centre (Jobcenter).
The main requirements for obtaining this type of benefit are as follows:
- Age from 15 years old till the retirement age;
- inhabitancy in Germany;
- a person is able to work just 3 hours a day;
- a person is unemployed or has a low salary, less than a living wage and their property is not enough to ensure the subsistence minimum.
Amount and timing of the Arbeitslosengeld II unemployment benefit
The amount of the ALG-II allowance is established by law and depends on the marital status, age and special needs of the recipient. The rates, norms of this allowance are shown in table 2 "Amount of social benefits in Germany" on the Amount of social benefits in Germany webpage.
Additionally, the recipient of the allowance is paid the cost of rental housing and heating, these amounts depend on the norms established for the place of the person's residence. Special needs associated with the additional costs of a person in connection with the disease, situation in the family, etc. are also taken into account.
In addition, the recipient of this allowance is entitled to one-off payments upon relocation, childbirth, etc. More information about benefits and allowances for a child can be found on this page of our website.
The ALG-II benefit is paid to the recipient monthly in advance, i.e. prior to the month, for which the person receives the benefit.
There is no time limit for receiving the ALG-II benefit, but applications for it have to be submitted regularly, before the end of the next settlement period. The customary settlement period is 12 months, so after applying for ALG-II, the person receives a decision of the labour exchange on the amount and duration of the benefit. By the end of this period you need to apply again.
Accounting for additional income when receiving the ALG-II benefit
If the unemployment benefit recipient has a part-time job or receives a low salary, this money is taken into account and thus reduces the amount of the benefit. If the beneficiary earns up to 100 euros inclusive, this money does not affect the amount of the benefit, when receiving more than 100 euros per month, the person is left with 20% of the received amount exceeding 100 euros, and the remaining money reduces the amount of the benefit. The more a person earns, the proportionately less money s/he has left. See table 4 below for details.
For example: suppose the recipient of the ALG-II allowance earns 300 euros, then 160 euros will be deducted from his/ her allowance. With 300 euros - 100 euros that do not affect the size of the benefit - 20% of the remaining 200 euros, i.e. 40 euros that are left to a person 160 euros in residuo will be deducted from the benefit. For an accurate computation as to your circumstances, use the calculator on the website of the Federal employment agency.
Table 4: Non-deductible minimum income when receiving the ALG-II allowance
|Amount of income, in euros||Non-deductible part of income as %|
|up to 100 €||100%|
|from 100.01 to 1000 €||20%|
|from 1000.01 to 1200 (or 1500 with children) €||10%|
|from 1200.01 (or 1500.01 with children) €||0%|
Income and property taken into account when calculating the ALG-II unemployment benefit
When calculating the benefit, the labour exchange takes into account the amount of income and property owned by the person and, accordingly, may reduce the amount of the benefit or refuse to pay it at all. The income and property to be taken into account include:
- Income from labour activity (as well as one-off bonuses and payments), rent received by a person,
- ALG-I and sick leave allowance (Krankengeld),
- refunded excess tax amounts paid,
- child benefit (Kindergeld),
- pecuniary gifts and winnings,
- cash and money in a bank account,
- stocks, securities,
- cars and real estate,
as well as some other types of income and property.
§ Employers benefit for employment, Eingliederungszuschuss
This type of benefit is paid not to the unemployed, but to the employer when employing an unemployed, if the integration of the latter at this workplace is associated with certain difficulties, for example, the unemployed person does not have enough work experience or knowledge of the German language, and also when people with disabilities and older people are employed.
The amount of this type of benefit is up to 50% of the earnings, that will be paid to the employee and can be paid monthly for up to 1 year. When employing disabled and elderly people, the amount of benefits may be increased. When an unemployed person older than 50 is employed, the allowance can be paid up to 3 years.
Thus, the employer will be financially interested in hiring a person whom, in fact, the state will pay half the salary and more. The decision to provide such an additional payment to the employer is taken by labour exchange agents.
§ Subemployment benefit, Kurzarbeitergeld
Due to temporary problems in the work of the enterprise or the peculiar features of its work, the employee can be transferred to shorter working hours, which accordingly affects the amount of the employee's salary. This measure can be applied in order to preserve the workplace, so as not to dismiss a person from the workplace at all. In this case, the employee is entitled to compensation payments in connection with a decrease in earnings when being transferred from full to part-time employment.
Depending on the reasons for the transfer of the employee to shorter working hours, this compensation may be of the following types:
- Konjunkturelles Kurzarbeitergeld - due to the difficult economic situation of the enterprise.
- Saisonales Kurzarbeitergeld - due to the seasonal character of the enterprise performance, changes in the weather that make the usual working rhythm of the company impossible.
- Transfer-Kurzarbeitergeld - due to the reorganization of the enterprise.
The amount of compensation for subemployment depends from 60 to 67% of the employee's salary. The application for this compensation is submitted by the employer.
The compensation is paid for a maximum of 21 months.
§ Support for retraining, advanced training or vocational education, Bildungsgutschein
In order for the unemployed to have more chances to get a job, the state provides financial support for their retraining, advanced training or vocational education. This support is mainly provided through a document called Bildungsgutschein. This document is the consent of the labour exchange to pay for the education of the unemployed.
In order to obtain the Bildungsgutschein, a person must have the status of the unemployed, besides, according to the executive agent of the labour exchange, additional education should be necessary so that the unemployed can find a suitable job.
§ Business start-up subventions, Gründungszuschuss
Recipients of ALG-I, starting a business as a main occupation that will enable them to support themselves, can apply for a Gründungszuschuss subvention. The mandatory requirement for receiving this subsidy is that the unemployed person is entitled to receive the ALG-I benefit for at least another 150 days. In addition, a novice entrepreneur should have a business plan, with a description of this activity, his/ her work experience and knowledge that will enable him/ her to successfully conduct this business. This business plan should be checked by a specialist (usually representatives of Industrie- und Handelskammern) who will deliver their opinion.
This type of benefit is paid in 2 stages: (1) for 6 months, monthly in the amount of your ALG-I allowance and an additional amount of 300 euros for social charges; (2) for a further 9 months 300 euros monthly for social charges.
If a start-up entrepreneur, after the period of receiving the Gründungszuschuss subvention, becomes unemployed again, the period of receiving the ALG-I unemployment benefit will be reduced for him/ her for the period during which s/he used to receive this subvention.
§ Business start-up subventions for ALG-II recipients or those resuming employment, Einstiegsgeld
This type of benefit is paid to the unemployed - the recipient of ALG-II, if s/he starts a business or finds a job, at which their salary is more than 450 euros (the wage amount, with which the employer will pay social insurance fees for the employee). When deciding on the payment of this type of subsidy, the labour exchange agent determines whether due to this labour activity the unemployed will provide themselves financially for a long time without receiving unemployment benefits and whether there is a need for such support. These subsidies are an incentive that stimulates an early job search and, as a rule, are designed for those who are able to find only low-paid jobs.
Upon the beginning of entrepreneurial activity, the labour exchange will be convinced that the unemployed is suitable for conducting this activity and that this activity is economically justified, profitable, and will allow the unemployed to do without state benefits in the near future.
The amount of this type of subventions is determined individually for each unemployed person, based on the amount of their monthly unemployment benefit and other factors and can be up to 50% of the monthly unemployment benefit. This subvention is provided for up to 24 months.
§ Links to the laws and official websites on the topic: unemployment benefits in Germany
- Brochure on the ALG-I benefit on the labour exchange website
- Brochure for job seekers without the right to unemployment benefit I
- Brochure "Financial Aid: What? How much? Who?" on the website of the labour exchange
- Brochure "Kurzarbeitergeld" on the labour exchange website
- Brochure "Support to vocational education and training"
* The EUR exchange rate in the tables is taken as of 19 october 2021 and amounts to 1.17 USD or 0.84 GBP at the European Central Bank exchange rate. The EUR, USD and GBR exchange rates in Germany