Unemployment Benefits - Germany

Germany

Unemployment benefit in Germany is known as Unemployment insurance and is part of the German Social security system. It was first established in 1927. The scheme is administered by the federal work agency.

All workers except interns contribute to the system. Since 2006 certain previously excluded workers can opt in to the system on a voluntary basis.

The system is financed by contributions from employees and employers. Employees pay 1,5% of their gross salary below the social security threshold and employers pay 1,5% contribution on top of the salary paid to the employee. The contribution level was reduced from 3,25% for employees and employers as part of labour market reforms known as Hartz. Contributions are paid only on earnings up to the social security ceiling (2012: 5,600 EUR).

The system is largely self-financed but also receives a subsidy from the state to run the Jobcenters.

Unemployed workers are entitled to:

• Living allowance known as unemployment benefit
• Help in finding work
• Training

Unemployed benefit is paid to workers who have contributed at least during 12 months preceding their loss of a job. The allowance is paid for ½ of the period that the worker has contributed. Claimants get 60% of their previous net salary (capped at the social security ceiling), or 67% for claimants with children. The maximum benefit is therefore 2964 euros (in 2012) In 2011 the federal Work Agency had revenues and expenses of 37.5 bn EUR

If a worker is not eligible for the full unemployment benefit or after receiving the full unemployment benefit for the maximum of 12 months, he is able to apply for benefits from the so-called Hartz IV program. He will receive 374 EUR per month for living expenses plus the cost of adequate housing (including energy & heating) and health care. Couples can receive benefits for each partner including their children. Additionally, children can get "benefits for education and participation".