Unemployment benefit: entitlement, amount, duration and suspension

A warehouse manager aged 57 resigns after twenty-two years to change careers, without a new job lined up. He expects 18 months of unemployment benefit at 1,407 € a month. The employment agency imposes a twelve-week suspension period and cuts the entitlement by a quarter: 4.5 months disappear, 6,331.50 € in total.

Three conditions and two notifications

Unemployment benefit (Arbeitslosengeld) is not welfare but an insurance benefit. Under § 137 SGB III, anyone claiming it must meet three conditions at once: be unemployed, have registered as unemployed with the employment agency and have completed the qualifying period. If one is missing, no entitlement arises, however long contributions were paid.

Under § 138 SGB III, being unemployed does not simply mean having no job. The law requires the absence of employment, personal efforts to find new work and availability for placement by the agency. Someone who refuses placement is without work, but not unemployed in the sense of this Act.

A small side job does no harm. Under subsection 3, a person still counts as without employment if their working time is less than 15 hours a week, with several activities added together. Conversely, the unemployed person must be able and allowed to take up reasonable work of at least 15 hours a week.

Registration as unemployed under § 141 SGB III is made electronically on the Federal Employment Agency's portal or in person at the competent local agency. It may be made in advance if unemployment is expected within the next three months. Under § 323(1), the benefit is then deemed to have been applied for.

This registration has no retroactive effect. § 325(2) SGB III states plainly that unemployment benefit is not paid retroactively. Someone who registers two weeks after their last working day loses those two weeks. The only exception covers days on which the agency itself was not open for business.

A separate duty is the job-seeker notification under § 38(1) SGB III. Anyone whose employment is ending must notify the agency as a job seeker at least three months before the end. If they learn of the end later, they have three days from that knowledge. The duty applies even while the dismissal is being challenged in court.

This has a practical side for the business. An employer who gives notice or signs a termination agreement does well to remind the staff member of this duty. A late job-seeker notification costs a one-week suspension period, and the resentment it causes often lands on the former employer.

Qualifying period and reference period

The qualifying period (Anwartschaftszeit) is the contribution side of the insurance. Under § 142(1) SGB III it is met by anyone who has been in compulsorily insured employment for at least twelve months within the reference period. Periods before an entitlement that lapsed because of suspension periods no longer count.

Under § 143 SGB III the reference period (Rahmenfrist) is 30 months. It starts on the day before all other conditions are met and runs backwards from there. It does not reach into an earlier reference period in which a qualifying period had already been completed.

For people on short fixed-term contracts, § 142(2) provides a reduced qualifying period of six months. Their days of employment must mainly come from contracts limited to no more than 14 weeks. In addition, their pay over the last twelve months may not exceed one and a half times the reference amount.

The Social Insurance Calculation Values Ordinance 2026 sets the reference amount under § 18 SGB IV at 47,460 euros a year. One and a half times that is 71,190 euros. Anyone who earned more in the twelve months before losing their job cannot rely on the reduced qualifying period, even if all their contracts were short.

60 or 67 per cent of the benefit pay

§ 149 SGB III has two benefit rates. The increased rate of 67 per cent applies to anyone with a child within the meaning of § 32 EStG. It also applies where only the spouse or civil partner has such a child, both are fully taxable and they do not live permanently apart. Everyone else receives 60 per cent.

The percentage is not applied to the last gross salary but to the benefit pay (Leistungsentgelt). This is a flat-rate net pay that the agency derives from the assessment pay. The difference explains why unemployment benefit in practice ends up well below 60 per cent of former gross pay.

Under § 151 SGB III the assessment pay is the average daily pay subject to contributions in the assessment period. That period covers the pay periods settled within an assessment frame of one year before the end of the last compulsorily insured employment.

If this period contains fewer than 150 days with a right to pay, § 150(3) extends the assessment frame to two years. If no sufficient period can be found there either, § 152 applies a notional pay by qualification group, each expressed as a fraction of the reference amount.

Some amounts are left out. Payments made because the employment ended, such as a severance payment, do not raise the assessment pay. Months of short-time work, on the other hand, do no harm: under § 151(3), the pay that would have been earned without the loss of working hours is used for them.

From the assessment pay, § 153 SGB III deducts flat-rate amounts: a social insurance lump sum of 20 per cent, wage tax and the solidarity surcharge. The tax class recorded at the start of the year in which the claim arises is decisive. A later change takes effect only under the narrow conditions of subsection 3.

Under § 154 SGB III unemployment benefit is calculated and paid per calendar day. A full calendar month counts as 30 days, whether it has 28 or 31. The monthly amount is therefore always thirty times the daily rate, which makes planning easier.

Side income during the benefit period is offset under § 155 to the extent that, after taxes, social contributions and work expenses, it exceeds an allowance of 165 euros a month. Anyone who already had a side activity for at least twelve months alongside insured work before becoming unemployed may keep more.

How long: the table in § 147

Under § 147 SGB III the entitlement duration depends on two factors: the length of compulsorily insured employment and the age reached when the claim arises. Insured months are counted in a reference period extended by a further 30 months for this purpose, that is, over the last 60 months.

The table has an edge that is often overlooked. Until the 50th birthday it stops at twelve months, however many years someone has paid in. Only from age 50 do the longer tiers open, and the highest duration of 24 months requires both 48 insured months and an age of 58.

Anyone who meets the reduced qualifying period for short contracts receives, under subsection 3 and regardless of age, a shorter duration: three months after six insured months, four after eight and five after ten. Only the ordinary reference period of 30 months is then counted.

An unused entitlement is not lost at once. If a new entitlement arises, § 147(4) extends its duration by the remainder of the old one, provided five years have not yet passed since the old one arose, capped at the maximum duration for the person's age.

The window for that remainder is not unlimited either. Under § 161(2), an entitlement can no longer be asserted once four years have passed since it arose.

Under § 148 SGB III the duration shrinks mainly by the days for which benefit has already been paid. Suspension days, days of failure to cooperate and half the days of benefit during vocational training are also deducted. From the month after reaching the standard retirement age, § 136(2) ends the entitlement entirely.

When the entitlement is suspended

A suspended entitlement (Ruhen) still exists but is not paid out for a certain time. Under § 157 SGB III this happens while pay is received or owed. If untaken holiday was paid out on termination, the entitlement is also suspended for the period of that holiday, starting from the end of the employment.

Under § 158 SGB III a severance payment leads to suspension only if the employment ended without observing the employer's ordinary notice period. The entitlement is then suspended until the day the notice period would have ended, for one year at most. Where the notice period is respected, the severance payment has no effect on the benefit.

The suspension is capped a second time. It does not run beyond the day by which the person, at their previous daily pay, would have earned 60 per cent of the severance payment. That share falls by five points for every five years of service and every five years of age above 35, but never below 25 per cent.

If the employer does not actually pay the wages or the severance payment, the agency pays anyway under § 157(3) and § 158(4) and recovers the amount from the employer. A business that fails to pay the severance agreed in a termination agreement with shortened notice will then be dealing with the Federal Employment Agency.

Suspension periods and their length

Under § 159 SGB III a suspension period (Sperrzeit) arises when someone acts contrary to the insurance without good cause. The most common case is giving up work: the person ends the employment themselves, or gives cause for dismissal by breaching the contract, and so brings about their own unemployment.

Signing a termination agreement also means taking part in ending the employment, since it would not have ended without that signature. The person must set out and prove the facts for good cause where they lie within their own sphere. Signing without such a reason risks the full suspension period.

The suspension period for giving up work lasts twelve weeks. It is cut to three weeks if the employment would have ended within six weeks anyway, and to six weeks if it would have ended within twelve weeks or if the full length would cause particular hardship.

During the suspension period the entitlement is suspended. That is only half the effect, because § 148 SGB III also shortens the entitlement duration by the suspension days. For a twelve-week suspension for giving up work, the reduction is at least a quarter of the entitlement duration. That quarter is often longer than the suspension itself.

The opening case shows this. A quarter of 18 months is 4.5 months, far more than twelve weeks. However, under § 148(2), the reduction for giving up work lapses entirely if the triggering event lies more than a year back when the entitlement arises.

Suspension periods add up. Anyone who has given cause for suspension periods totalling at least 21 weeks, has received written decisions on them and has been warned of this consequence loses the entitlement altogether under § 161(1) no. 2. Suspension periods from the twelve months before the claim arose are counted too.