The GW Expat Blog

Unemployment in Germany

December 26, 2022

Not the most upbeat topic for the day after Christmas, but one that has been on many people’s minds as we emerged from the pandemic into an initial economic upswing, quickly followed by a collapse in many industries. I work as Talent Acquisition (an internal recruiter) for a Berlin startup and have heard too many heartbreaking stories these last months of people unexpectedly losing their jobs. So many job seekers have told me about not making it out of the typical 6-month probation as entire departments are cut, offers rescinded before they start a new role but after they have left their last position and moved countries… it’s brutal out there.

Freelancer working with a Mac

Working in Germany PHOTO: Christin Hume on Unsplash

As unpleasant as this whole business is, at least the unemployed can take comfort in the strong social security system that exists in much of Europe. There is a well-established net to catch the many affected as – of course- unemployment is not a new thing as Sarah reports in her post back from 2014. It is not perfect and has its own intricacies to navigate, but here is an overview and guide on how to apply for unemployment in Germany.

State of Unemployment in Germany

Unemployment can be a touchy subject in Germany. The separation of East and West Germany resulted in long-term inequity with former socialist East Germany economically lagging behind the capitalist former West and sporting much different unemployment numbers between the two. The West was understandably resentful of the drain this put on the reunited country’s resources and not always understanding of the many factors at play. Since reunification in 1989 it has been a rocky road and the former East still economically trails the West. However, booms in the startup industry centered in Berlin, Berlin’s continued pull as a destination – among other factors – have allowed the East to gain ground.

It will be interesting to see how unemployment numbers look after the wild ride that has been 2022, but annual average unemployment rate is currently at 5.3 percent according to Statista.

The contribution rate for unemployment insurance is 2.4% of earned income and is typically paid 50% by the employee and 50% by the employer. If you are self-employed or own your own business you can voluntarily contribute.

Who can claim unemployment benefits in Germany?

One of the first things to note is who is eligible to claim unemployment benefits in Germany. Sadly, not every case qualifies. Also note there are reciprocal situations within the EU, but we will focus on claiming unemployment in Germany after working in Germany in this post.

Generally who qualifies for benefits:

  • If you are over 15 and under 65
  • If you are an EU, EEA or Swiss citizen, or hold a valid settlement permit or temporary residence permit that entitles you to work in Germany
  • If you have paid into the versicherungspflichtig (compulsory insurance) for at least twelve months of the 30 months before becoming unemployed
  • If you are available and willing to work (i.e. you must be fit to work and prepared to accept any reasonable employment)
  • You are involuntarily unemployed like in the case of being fired or laid off. (If you voluntarily quit, you might not be eligible for benefits for the first 3 months after your resignation for a blocked period called “Sperrzeit“)
  • If you have registered at the Arbeitsagentur (labor office) and have applied for unemployment benefit

I have noticed a lot of posts on forums regarding forced resignations and employer’s request for employees to sign a termination agreement. Many people, particularly foreigners, are uncertain of their rights and some companies take advantage of this by trying to get the employee to sign the document as soon as they notify that the role has been terminated. People should know you have the right to take some time and review the document in private. Signing this termination is treated as a resignation and may result in the loss of unemployment benefits for the first three months.

Once terms are decided, you should receive a termination letter that indicates the reason for the decision, when you became aware of it and the last day of work (Arbeitsbescheinigung).

Unemployment Benefits in Germany

Unemployment benefits are divided into the intended short-term benefit of Arbeitlosengeld 1/ ALG I or a more long-term benefit of ALG 2 called “Hartz IV”. Most job-seekers will apply for ALG I.

Benefits are provided by the Federal Employment Agency (Bundesagentur für Arbeit). The benefit is 60% of your previous average wage (or 67% if you have children). This benefit is subject to automatic taxes and social security contributions like a regular wage so the netto (net) amount will be less. This online calculator (in German) can help calculate the benefit.

500-euro banknotes

How long a job-seeker can receive these benefits is in relation to age (you can only claim for 1 year if you are under 45-years-old) and how long you were employed and contributing to the system. Generally:

  • With 12 months of contribution you are entitled to 6 months of benefits
  • With 16 months of contribution you are entitled to 8 months of benefits
  • With 20 months of contribution you are entitled to 10 months of benefits
  • With 24 months of contribution you are entitled to 12 months of benefits
  • With 30 months of contribution you are entitled to 15 months of benefits
  • With 36 months of contribution you are entitled to 18 months of benefits
  • With 48 months of contribution you are entitled to 24 months of benefits

Of course the monetary support isn’t the only resource provided. Though there are mixed reports fo the agency’s effectiveness, it also provides a budget for retraining, CV and job counselling, etc. which all require regular check-ins with your case worker.

Another vital benefit provided in both ALG schemes is that your health insurance is paid for.

You may lose access to your benefits if you:

  • do not register promptly as a jobseeker
  • are offered work but do not accept it
  • do not participate in integration measures like language or skills training
  • fail to provide evidence you are looking for work

If you do not qualify for ALG I or need additional support once your original benefits run out, you can apply for a basic subsistence benefit known as Arbeitlosengeld II or ALG 2, often called Hartz IV. Similar to welfare in the USA, people who apply for this benefit have been subject to unkind stigmatization and the whole system is in need of a re-vamp. The “traffic light coalition” of Social Democratic Party of Germany (SPD), Free Democratic Party (FDP) and Alliance 90/The Greens is set to offer just that with plans to replace Hartz IV with a new plan called Bürgergeld (citizens’ allowance). However, these plans are still in the works.

How to apply for Unemployment Benefits in Germany

One of the silver linings of the pandemic is that it has forced the dinosaur of Germany’s bureaucracy to step closer to the 21st century. This includes greater digitalizaion and access to government agencies online. While you once had to report to the Arbeitsagentur in person, it is now possible to apply for benefits online (along with step-by-step instructions in German).

If you are feeling brave, you can try their hotline at 0800 4 555500 which does offer English support. Note that this registration must be done quite quickly once you find yourself without work, ideally as soon as you find out (up to three months before) or at the latest within three days. If you fail to report in time, benefits may be delayed or you may be ineligible for that period.

To apply, you will need to provide:

  • Application
  • Personal information (provide ID card or passport with visa info, anmeldung)
  • Bank statements from the last six months
  • Rental contract
  • Proof of living costs (i.e. bills for utilities)
  • Termination letter and employment contract
  • Krankenkasse (health insurance) card
  • Details of your income and assets

The Amt will then decide on your case – usually within two weeks – but don’t be surprised if they need further evidence and more documentation.

While the website is a time saver and makes translating things in to different languages much easier, you will need to go to the office to complete registration. English may be spoken at these appointments but offices recommend you bring a translator if you are not confident speaking German. In-person visits must be completed by the first day without a job at the latest. Upon completing your online registration you should be directed to your nearest Amt, but this location tool can also help you find the right location.

Another complications for foreigners is the effect job loss will have on your visa or resident status. You will also have to notify the Ausländerbehörde (immigration office) of the change in your job status. The foreigners’ office can decide to extend your residence permit by 6 months to give you a chance to find a job and approve ALG 1. Unfortunately, it is out of your hands but typically the offices will give you time to sort matters out.

Hopefully this post will help you prepare if you find yourself in need of unemployment support in Germany. And once the headache of support is settled, you can move on to the next hurdle of looking for work and starting a new job in Germany. Good luck! My thumbs are pressed for you.

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About Erin "ebe" Porter
Motherlord of an American expat family in Berlin. I hail from rainy (but lovely!) Seattle & am raising two little Berliners. Drink, travel, write.

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