Unemployment Insurance : Germany

Germany’s statutory unemployment insurance scheme was introduced in 1927. It is now governed by the Labor Promotion Act of 1969. The authority administering the scheme is the Federal Institute for Employment in Nuremberg. Unemployment insurance is obligatory for all employees. Contributions are paid half by the employee and half by the employer.

Any unemployed person whose previous employment was subject to insurance contributions for a specific period of time and who is ready to accept “reasonable” employment offered by the labor exchange is entitled to draw an unemployment benefit, which may be as much as 67 percent of net pay. As a rule it is paid for a maximum period of one year, in the case of older unemployed people at most for 32 months. Anyone then still unemployed can apply for unemployment assistance of up to 57 percent of his or her net wage or salary, whereby assets and other sources of income, including those of family members, are taken into account.The Federal Institute for Employment also pays benefits to those who are on short time or who are unable to work during the cold winter months (e.g. construction workers).