Know Your Rights: Understanding Unemployment Benefits in Germany in 2021

unemployment benefits in germany

How to Successfully Navigate Unemployment Benefits in Germany as a Foreigner in 2021

Are you thinking about quitting your job or were you recently let go? Now is the time to get familiar with unemployment benefits in Germany.

Germany has a generous support program for the unemployed, which can be a saving grace if you want to resign or are faced with a choice that isn’t yours in that department.

Since moving to Germany, I’ve had a couple of encounters with the Bundesagentur für Arbeit. This post answers the most pressing FAQs I had, when, as a confused foreigner, I scrambled to get answers in English. As such, I hope to shed some light on your questions, too.

Please note that I am not a legal expert, nor am I in any way affiliated with the Bundesagentur für Arbeit. While the questions below are answered to the best of my knowledge, do not take them as legal facts.

So, let’s dive into the top FAQs regarding unemployment benefits in Germany in 2021.

Unempoyment Benefits in Germany: FAQs in English

Who is eligible for unemployment benefits in Germany?

Good news: if you are registered in Germany (as in, your primary address is located in the country) and have a valid residence permit, you are eligible for unemployment benefits. This is true regardless of nationality.

Indeed, if you have worked in the country for more than 3 months, you are eligible to claim benefits while you look for your next role. Your particular situation will affect the type of financial aid you receive. More on that below.

If you have worked elsewhere in the EU and now live in Germany, you may also eligible for unemployment benefits.

unemployment benefits in germany
If you are registered in Germany and fulfill a few criteria, you should be eligible for unemployment benefits. Photo by Roman Kraft on Unsplash.

What are the 2 types of unemployment benefits in Germany?

Arbeitslosengeld 1

Arbeitslosengeld 1 is typically what people first receive when they either resign or are let go. The conditions to obtain Arbeitslosengeld 1 are as follows:

  • You are registered in Germany.
  • You have worked in Germany and paid social contributions for at least 12 out of the last 30 months.
  • You have registered as a job seeker at the Arbeitsagentur.
  • You are applying for new positions (and not just chilling at home).

Through this program, you will get 60% of your average monthly salary for the last year, after taxes. This calculation is based on a 40-hour workweek. If, for example, you decide that you only want to work 32 hours a week (so 80% of a typical 40-hour workweek), you will receive 80% of 60% of your average monthly salary over the last 12 months.

To determine your unemployment benefits in Germany, this calculator can come in handy,

Arbeitslosengeld 2

This program exists to help people who are in dire financial need. Aid is granted to people who:

  • Have not found a job after 1 year of receiving Arbeitslosengeld 1, or
  • Have not worked in Germany for 12 months in the last 24 months, but have worked for at least 3 months in the last 6 months.

Arbeitslosengeld 2 is a much stricter financial aid program, however:

  • You will be required to disclose and liquidate all of your worldly assets (properties, stocks, etc) before becoming eligible.
  • There are very tight travel restrictions.
  • You will be entitled to less money than through Arbeitslosengeld 1, although your rent will be covered.
  • The process is more complicated, involving much more paperwork.

For the rest of this post, we will focus on Arbeitslosengeld 1.

unemployment benefits in Germany
Germany is one out of only 72 countries to offer unemployment benefits. Photo by Ansgar Scheffold on Unsplash.

How can I register for unemployment benefits in Germany?

To register for unemployment benefits in Germany, you will need to complete 2 steps:

  1. Register as seeking employment: this will put you in touch with an advisor who will send relevant jobs your way. Make sure you do this first, otherwise your application for financial support will be denied.
  2. Register as unemployed. This is the portion of the application through which, if approved, you will be able to receive financial aid.

You can start your application to both programs on this page (in English). While some of the steps have been translated to English, at one point you may run into German text.

If you don’t have a German friend or partner to help out, I highly recommend using the online translation tool Deepl. Their translations are quite accurate, even when it comes to legalese.

How has working with the Bundesagentur für Arbeit changed since the pandemic?

Since last year, it is much simpler to claim unemployment benefits in Germany. The process has been entirely digitalized and you no longer need to show up in person at all. You can apply for benefits online, verify your identity through an app, and have calls instead of in-person meetings with your assigned advisor.

How long can I claim unemployment benefits in Germany?

If you meet the eligibility requirements for Arbeitslosengeld 1, you will be able to receive unemployment benefits in Germany for up to one year.

If you are let go, you will receive financial support for 6 to 12 months, depending on how long you have contributed to unemployment insurance. In this case, financial aid will start from the first official day that you are without a job.

Do I get unemployment benefits if I choose to resign?

If you decide that your current job is not right for you, you can still resign and receive unemployment benefits in Germany. However, you will only receive compensation for 9 months. For the first 3 months of unemployment, you won’t receive any financial aid. This being said, your health insurance will be covered from day 1 of registering for unemployment.

unemployment benefits in germany
If you choose to resign from your job, you are still eligible to receive 9 months of unemployment benefits. Photo by Israel Andrade on Unsplash.

Can Arbeitslosengeld 1 be extended beyond one year?

As a matter of fact, you can keep receiving Arbeitslosengeld 1 for a bit longer, if you register for a course approved and paid for by the Bundesagentur für Arbeit. Every such course will extend your ALG1 benefits by 2 weeks. Ask your advisor about the specifics.

Can I travel while claiming unemployment benefits in Germany?

Yes, travel is possible while receiving unemployment benefits in Germany. If you wish to continue claiming benefits, though, the total days away from your residence cannot exceed 21 in a calendar year (including weekends). There is, however, a loophole.

If you plan to travel for, say, 3 months, you can pause your unemployment benefits for that period at no consequence to you. Upon returning to Germany, you will be able to start receiving benefits again. In fact, if you have worked for more than 12 months within 2 years, you can use your benefits at your leisure within the 4 years to come.

It is important to note that you will be responsible for your own health insurance while you are not receiving unemployment benefits.

Will I still get financial assistance if I leave Germany?

You will be able to retain your unemployment benefits if you leave Germany and register in another EU country (or Switzerland).

You can also temporarily leave Germany to job hunt in another EU country for up to 3 months and continue receiving benefits. You could technically even do this 3 times in 3 different EU countries. To be eligible for financial aid abroad, though, you do have to stay in Germany for the first few months of your unemployment.

unemployment benefits in Germany
Unemployment benefits in Germany can also, in many cases, be used in other EU countries. Photo by Martin Fahlander on Unsplash.

Who takes care of my health insurance while I am unemployed?

Germany’s compulsory health insurance may be a big concern for many people thinking of leaving their jobs or for those who are already unemployed.

If you have public health insurance, your provider will continue to cover you at no extra charge for the first month after saying goodbye to your job. In most circumstances, the Bundesagentur für Arbeit will then take over paying for your health insurance, even if you aren’t yet eligible for other financial assistance – provided you have registered as unemployed.

Those who are privately insured will have to pay out of pocket from day 1.

If the month passes and you are not employed and not covered by the Bundesagentur, you will have to pay out of pocket – including for the previous month.

For some reason, if you are not eligible for unemployment benefits, your health insurance provider will contact you and ask how you would like to pay going forwards. They will send you a form asking you to confirm your income. If you make less than a certain amount, you will pay a monthly base fee of roughly 190€.

Do not fear: you will not get kicked out of your health insurance plan. Instead, you will become a “voluntary” contributor.

Can I have a mini-job or freelance role while claiming unemployment benefits in Germany?

Yes, you can – with some conditions attached. While receiving Arbeitslosengeld 1, you can work up to 15 hours per week at a mini job or in a freelance capacity. You can make up to 165€ per month from these side hustles before your unemployment benefits get reduced.

For example, if you earn 167€ from your mini job and are eligible for 1000€ of unemployment benefits, you will receive 998€ from the Bundesagentur für Arbeit.

If you have business expenses as a freelancer, you can deduct these from the monthly income you have to share with the Bundesagentur für Arbeit. So if you make 300€ per month as a freelancer but spend 150€ on business expenses, you won’t lose out on any money from the state, because your total income from freelancing does not exceed the 165€ threshold.

Make sure you inform the Bundesagentur für Arbeit of any changes in your financial situation ASAP (aka if you start making more or less money) so that your benefits can be adjusted accordingly.

unemployment benefits in Germany
You can still have work for up to 15 hours a week while claiming unemployment benefits in Germany. Photo by Christopher Gower on Unsplash.

Am I bound to the Bundesagentur für Arbeit until I find a job?

No. Participation in the Bundesagentur für Arbeit’s unemployment benefits scheme is completely voluntary. You can deregister at any time. This will free you of the obligation to have meetings with counsellors, apply for the jobs they send your way, and your travels will no longer have to be approved by the agency.

Of course, you will then have to cover all of your expenses with private funds, as you will no longer receive any financial support.

Official resources in English

Here are a couple of official resources related to unemployment in Germany:

Extra unemployment benefits in Germany: free coaching

Irene Yu is a Berlin-based business coach who offers free career coaching to unemployed people in Germany. In order to sign up, you first need to register as an unemployed job seeker at the Bundesagentur für Arbeit.

After that, you can fill out this form, and Irene will get in touch with you to schedule a twenty-minute introduction call. Next, she’ll connect you with someone who will help you apply for a free coaching voucher.

It’s a little bureaucracy, but very straightforward! Then you can begin your 8-12 week coaching program (again at no charge to you!). Through mindful, empowering, and purpose-driven coaching you can reach tangible results, whether you need guidance figuring out what kind of career your skills can get you, CV help and interview prep, support starting a business, or anything in between.

unemployment benefits in Germany
Unemployment benefits in Germany include free career coaching with professionals like Irene Yu.

Final thoughts on unemployment benefits in Germany in 2021

The process for applying to receive unemployment benefits in Germany is relatively straightforward, although you can expect a lot of bureaucracy along the way. However, it is good to know that the Bundesagentur für Arbeit is there to support you when you need it.

Meanwhile, if you are interested in finding an English job in Berlin, make sure you check out this post next.

2 thoughts on “Know Your Rights: Understanding Unemployment Benefits in Germany in 2021

  1. Thank you for this awesome and in depth article! A related topic would be how to get German language or professional training while on unemployment benefit.

  2. Thanks. Well written. It should be noted that mortgages are not covered; only rent or only the interest payments on a mortgage are considered. So at present I am left with 50€ per month for food and essentials after mortgage and Nebenkosten and Internet.

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