Unemployment often hits people unexpectedly. The first question is then: What financial security am I entitled to? The German social security system offers various compensation benefits, but the differences between unemployment benefits, sickness benefits, short-time work benefits and other social benefits regularly cause confusion. This article explains who is entitled to unemployment benefit 1, how the calculation works and which benefit applies in which life situation.
What is unemployment benefit?
Unemployment benefit 1 (often referred to as ALG 1 for short) is an insurance benefit provided by German unemployment insurance. The legal basis is Third book of the Social Code (SGB III). Unlike civil benefit (formerly unemployment benefit II or Hartz IV), which represents a tax-financed basic insurance, entitlement to unemployment benefits is based on insurance contributions paid during employment.
Objective and purpose of the service
Unemployment benefits serve as a financial bridge between two employment relationships. It is intended to enable job seekers to secure their livelihood while they find new employment. The benefit is limited in time and depends on the length of previous insurance periods.
Differentiation from other social benefits
While unemployment benefit 1 is a contributory compensation benefit, the citizen benefit only applies as a subordinate basic benefit when there is no longer any entitlement to ALG 1 or the benefit is insufficient. Both systems follow different logics: insurance principle versus requirement principle.
Who is entitled to unemployment benefits?
Eligibility for unemployment benefits is subject to several conditions. The most important: You must be unemployed, have registered as unemployed and fulfill the so-called eligibility period.
Eligibility period and insurance periods
The regular eligibility period is 12 months of employment subject to insurance within the last 30 months before unemployment registration. For certain groups of people, there is a reduced eligibility period of 6 months within 30 months if employment was mostly fixed-term.
Deadlines for registering unemployment
Timely reporting is crucial. You must register as unemployed in person with the Employment Agency no later than the first day of unemployment. As soon as you find out about your employee, you should also register as a jobseeker, no later than three months before the end of the employment contract. If you miss this deadline, there is a risk of a blocking period of one week.
Rest and blackout periods
In certain cases, the right to unemployment benefits is suspended or there is a blocking period. There is a risk of a blocking period of usually 12 weeks in the event of:
- Self-termination without good reason
- Termination agreement without good cause
- refusal to work
- Inadequate application efforts
- Rejection of reasonable work
During a blackout period, you will not receive unemployment benefits and the period of receipt will be reduced by at least a quarter.
How is unemployment benefit calculated?
The calculation of unemployment benefits follows a procedure defined by law. The basis is the gross wage from the assessment period.
Assessment period and assessment fee
The assessment period covers the last 12 months before the claim arose, during which you were employed subject to insurance and earned pay. Periods in which you have already received compensation benefits such as sickness benefit or short-time work allowance are excluded.
The assessment fee is the average gross salary subject to contributions from this period. This is used to calculate the daily tax fee, from which in turn lump sum social security contributions and income tax are deducted.
Benefit rate: 60 or 67 percent
The benefit rate is:
- 60 percent of the lump sum net salary excluding children
- 67 percent of the lump sum net salary with at least one child
A child is defined as a biological or adopted child for whom you or your spouse/partner receive child support.
Practical examples of calculation
Example 1: Single without children
- Gross salary (month): 3,000 euros
- Assessment fee (day): 100 euros
- Flat net fee: approx. 60 euros
- Unemployment benefit (day): 36 euros
- Unemployment benefit (month): approx. 1,080 euros
Example 2: With a child
- Gross salary (month): 3,000 euros
- Assessment fee (day): 100 euros
- Flat net fee: approx. 60 euros
- Unemployment benefit (day): 40.20 euros
- Unemployment benefit (month): approx. 1,206 euros
Example 3: Higher income without children
- Gross salary (month): 5,000 euros
- Assessment fee (day): 166.67 euros
- Flat net pay: approx. 96 euros
- Unemployment benefit (day): 57.60 euros
- Unemployment benefit (month): approx. 1,728 euros
These examples show that the higher the previous income and the more maintenance obligations there are, the higher the unemployment benefit. However, there is a contribution assessment limit which limits the maximum eligible earnings.
Duration of unemployment benefit receipt
The period of receipt of unemployment benefit 1 is staggered by law and depends on two factors: the length of employment subject to insurance and the age at which the claim arose.
Standard duration and graduation
The minimum subscription period is 6 months with a 12-month insurance period. The maximum subscription period is 24 months for older employees with a long insurance period:
Renewals and special cases
In certain cases, the subscription period can be shortened, for example due to blackout periods. However, an extension is only possible in a few exceptional cases, for example when taking part in longer continuing education measures where entitlement is suspended during the measure.
{{blog-cta}}
Unemployment benefits compared with other compensation benefits
The German social security system has various compensation benefits that apply in different life situations. The difference to pure social benefits: Compensation benefits require prior payment of contributions or employment subject to insurance.
What are compensation benefits?
Compensation benefits temporarily replace the loss of pay in the event of unemployment, illness, short-time work or maternity leave. They are based on previous income and serve to secure income. The most important include:
- Unemployment benefit 1
- Sickness benefit
- Short-time work allowance
- maternity benefit
- Parental allowance
Comparative table: The most important compensation payments
Social benefits versus compensation benefits
Social benefits such as citizen benefit, housing benefit or child allowance are needs-based and are not linked to previous contributions. They take effect when there is not enough income for a living. Compensation benefits, on the other hand, are insurance benefits directly related to previous earnings.
Sickness benefit, short-time work allowance and maternity benefit: When does which benefit apply?
Each compensation payment covers a specific area of life. The clear delimitation helps to identify one's own requirements.
Sickness benefit: When work becomes impossible due to illness
Statutory health insurance providers who have been unable to work for more than six weeks receive sickness benefit. In the first six weeks, the employer continues to pay the salary.
Requirements:
- Statutory health insurance with entitlement to sickness benefit
- Incapacity for work of more than six weeks
- Medical certificate
Altitude:
Sickness benefit amounts to 70 percent of gross earnings, but a maximum of 90 percent of net earnings. Contributions to pension, long-term care and unemployment insurance are still deducted from this amount.
duration:
For the same disease, a maximum of 78 weeks within three years. The claim then ends and, where appropriate, a disability pension or unemployment benefit applies.
Short-time work allowance: cushioning operational crisis situations
Short-time work allowance steps in when a company temporarily does not offer enough work but wants to avoid layoffs. It partially compensates for the loss of earnings.
Requirements:
- Significant loss of work (at least 10 percent of employees with more than 10 percent loss of pay)
- Operational or economic reasons
- Advertisement to the Employment Agency by the employer
Calculation:
The short-time work allowance amounts to 60 percent (excluding children) and 67 percent (with children) of the lost net salary. Many employers are increasing voluntarily, some of which are also regulated by collective agreements.
duration:
Normally up to 12 months, in times of crisis (such as during the corona pandemic), the subscription period can be extended. While receiving short-time work allowance, the employment relationship remains in place.
Maternity benefits: protection for expectant mothers
The maternity benefit financially protects pregnant women during maternity leave periods. It is paid by health insurance and by the employer.
Claim:
Employees with statutory health insurance receive maternity benefits during protection periods (6 weeks before and 8 weeks after birth, 12 weeks in the case of premature or multiple births).
Altitude:
Health insurance pays a maximum of 13 euros per calendar day. The employer pays the difference to the average net salary of the last three months as a subsidy. This means that pregnant women receive their full net salary during maternity leave.
Special features:
Privately insured or marginally employed women receive a one-time maternity benefit from the Federal Social Security Office of up to 210 euros.
Application, deadlines and necessary documents
The receipt of unemployment benefits does not start automatically. They must take action and meet certain deadlines.
Step by step towards unemployment benefits
Step 1: Job Seeker Report
Register as a jobseeker immediately after becoming aware of the end of employment, at least three months in advance. This can be done online via the Employment Agency portal or in person.
Step 2: Report unemployment
On the first day of unemployment, you must register as unemployed in person. Appointments can be booked online. Without this notification, there is no entitlement to benefits.
Step 3: Make an application
The application for unemployment benefits can be completed online or submitted during an appointment with the agency. All required documents should be submitted in full.
Step 4: Demonstrate mediation efforts
You must actively search for work and prove this through applications. The agency may require monthly activity records.
Necessary documents
To submit an application, you need:
- ID card or passport with confirmation of registration
- social security card
- Work certificate from the last employer
- Letter of termination or termination agreement
- cv
- For children: proof of child support or birth certificates
- Bank account
The employment certificate is particularly important as it contains all employment-relevant data. Employers are required to issue them.
Common mistakes when submitting applications
Too late message: If you miss the deadlines, you risk loss of performance or blackout periods. Get in touch as soon as you hear of the termination.
Incomplete documentation: Missing documents delay processing. Check beforehand whether all evidence is available.
Wrong information: Inaccurate or incomplete information may be considered fraud and lead to refunds.
Missed appointments: Appointments with the agency are mandatory. Anyone who is absent without excuses must reckon with a blocking period.
Tips for optimal preparation
Careful preparation makes the application process much easier. Collect all relevant documents early on. Write down important dates, such as previous employment periods, salaries, and breaks.
If your employer has a time recording software As ZEP uses, you can often access your complete working time data yourself. This documentation helps to provide complete proof of periods of employment. Precise time recording can make the difference between changing working hours or overtime, whether all times are correctly included in the tax base.
Common special cases and questions from practice
Reality often presents more complex situations than standard cases. Here are a few common constellations.
Unemployment benefits despite a mini-job or part-time
Anyone taking up a mini-job (up to 538 euros per month, as of 2025) in addition to receiving unemployment benefits can do so without deductions, provided that the working time is less than 15 hours per week. If it is higher, you are no longer considered unemployed.
If earnings are higher, the income is offset against unemployment benefits. An allowance of 165 euros remains free of charge.
Self-employed and voluntarily insured persons
Self-employed persons are generally not entitled to unemployment benefits, unless they have voluntarily taken out unemployment insurance (so-called compulsory insurance relationship upon application). This option must be applied for within three months of starting self-employment.
After paying contributions for at least two years, you are then entitled to unemployment benefits if you give up self-employment.
Switching between different compensation benefits
A typical case: Someone receives sickness benefits but is no longer healthy and is unable to return to work. What's happening?
After the sickness benefit (78 weeks) has been exhausted, you may be entitled to unemployment benefits, provided that the eligibility period has been met. The sickness benefit period counts as insured time. However, the person concerned must be able to work and be available to the labour market. If this is not the case, a disability pension is more likely to be considered.
Another case: While receiving unemployment benefits, a prolonged illness occurs. Here, health insurance pays sickness benefit, while entitlement to unemployment benefits is suspended.
Rejection of the application: what to do?
If your claim for unemployment benefits is rejected, you will receive a written notice with instructions on how to appeal. You have one month to file an appeal.
Common reasons for refusals:
- Qualifying period not met
- Missing or late unemployment registration
- Blocking period due to personal fault
A well-founded appeal with supporting documents can change the decision. For complex cases, advice from a specialist lawyer in social law or a social counseling center is worthwhile.
Documentation as the key to securing claims
In practice, details often determine the amount or duration of benefits. Complete documentation of working hours, pay and employment periods is therefore essential. Modern time recording systems like ZEP help employers and employees to precisely record all relevant data and make it available quickly when required. Especially when it comes to frequently changing projects, overtime or special regulations protect professional time recording from subsequent discrepancies that could jeopardize claims.
conclusion
The compensation system in Germany is complex but logically structured. Anyone who knows the differences between unemployment benefits, sickness benefits, short-time work benefits and maternity benefits can react quickly in an emergency and avoid financial disadvantages.
Unemployment benefit 1 is an insurance benefit that is subject to clear conditions: sufficient insurance periods, timely reporting and availability for the labour market. The amount is based on previous income, the duration is based on age and insurance period.
The most important advice: Be proactive. Find out about your claims early on, collect all necessary documents and meet deadlines. Careful documentation of your employment periods and remuneration significantly facilitates the application process and secures your claims.
Anyone who understands the system can use it to their advantage and secure themselves financially during transition phases without creating unnecessary hurdles.
FAQs
How is my unemployment benefit calculated?
The calculation is based on your average gross salary over the last 12 months before unemployment. A lump sum of social security contributions and income tax are deducted from this. You will then receive 60 percent of this lump sum net salary without children or 67 percent with at least one child. With a gross salary of 3,000 euros, that means around 1,080 euros per month without children or 1,206 euros with a child.
What documents do I need to apply for unemployment benefits?
You need your identity card, social security card, employment certificate from your last employer, letter of termination or termination agreement, a current curriculum vitae and your bank details. If you have children, bring additional proof of child support or birth certificates.
What is the difference between unemployment benefits and sickness benefits?
If you are unemployed, you will receive unemployment benefits after at least 12 months of insurance and amount to 60 or 67 percent of the net. Health insurance pays sickness benefit in the event of prolonged incapacity from the seventh week of illness and amounts to 70 percent of the gross, a maximum of 90 percent of the net. Unemployment benefits require the ability to work, and sickness benefit in particular their absence.
How long will I receive unemployment benefit 1?
The subscription period depends on your insurance period and age. At least 6 months with a 12-month insurance period, maximum 24 months for people aged 58 and over with a 48-month insurance period. There are staggered regulations between these extremes: With 24 months of insurance, you receive 12 months of unemployment benefits, from 50 years of age and 30 months of insurance period, 15 months.
Can I get unemployment benefits if I get sick while I'm unemployed?
Yes, if you fall ill for more than six weeks while receiving unemployment benefits, the health insurance company will cover and pay sickness benefit. Your claim to unemployment benefits is suspended in the meantime and continues after the illness has ended. This does not extend the subscription period, but you also do not lose any days of claim due to illness.
When is my claim for unemployment benefits suspended?
Your claim is suspended, among other things, if you receive sickness benefit, during a blocking period due to personal fault, if you receive severance payment with a shortened notice period or if you are temporarily unavailable to the labour market. You will not receive any benefits during the rest period, but the claim persists and can then be claimed again.
