Status: 15.01.2024, 16:42 PM
By: Franziska Kaindl
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If you receive a severance payment, you have to expect that this will be credited to your unemployment benefit. But it can also be avoided.
Companies often offer their employees severance pay if they want to terminate the employment relationship – for example, for operational reasons. For the period of bridging, during which the employee has not yet landed a new job, there is then unemployment benefit I. However, the question arises: does the severance pay affect unemployment benefits?
Is there still unemployment benefit in the case of severance pay?
Anyone who leaves the company before the specified notice period and receives severance pay must expect that their entitlement to unemployment benefits will be suspended for the time being. © Yuri Arcurs/Imago
Under certain conditions, entitlement to unemployment benefit may be suspended. This is the case if the employment relationship ends earlier than the notice period stipulated in the employment or collective agreement as a result of a termination agreement with severance pay. If no deadline has been agreed there, the statutory notice periods from the German Civil Code (§ 622 BGB) must be observed. Depending on how long you have been employed by your employer, this can range from one to seven months. The entitlement to unemployment benefit is suspended until the expiry of your original notice period, but not longer than one year (§ 158 SGB 3).
Result
In the case of a termination agreement, make sure that the employment relationship does not end earlier than in the case of timely termination. Then you will receive the full unemployment benefit.
Why is entitlement to unemployment benefit suspended?
The legislator wants to prevent employees from reaping double benefits with severance pay and unemployment benefits. Therefore, the start of the payment of unemployment benefits will be postponed. In contrast to a blocking period, however, the entitlement to full unemployment benefit remains, as the portal Finanztip explains. Important: As long as your entitlement to unemployment benefit is suspended, you are not covered by the Employment Agency.
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Notice period not met: How the severance pay is credited to unemployment benefit
But what happens to the unemployment benefit if the contractual notice period has not been met? In this case, the severance pay will be deducted from the unemployment benefit. This means that you do not receive unemployment benefits immediately, but have to wait until the rest period is over. This begins at the end of the employment relationship and runs until the end of the ordinary notice period.
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However, the rest period can be shortened due to a variety of factors. These include:
- the amount of severance pay
- the length of service
- the age of the employee at the time of termination
- the gross salary
In the table, you can see the percentage of severance pay – depending on age – that affects the rest period of unemployment benefits:
| Years in the company | From the age of 35 | From the age of 40 | From the age of 45 | From the age of 50 | From the age of 55 | From the age of 60 |
|---|---|---|---|---|---|---|
| less than 5 years | 60% | 55% | 50% | 45% | 40% | 35% |
| 5 or more | 55% | 50% | 45% | 40% | 35% | 30% |
| 10 or more | 50% | 45% | 40% | 35% | 30% | 25% |
| 15 or more | 45% | 40% | 35% | 30% | 25% | 25% |
| 20 or more | 40% | 35% | 30% | 25% | 25% | 25% |
| 25 or more | 35% | 30% | 25% | 25% | 25% | 25% |
| 30 or more | 30% | 25% | 25% | 25% | 25% | 25% |
| 35 or more | 25% | 25% | 25% | 25% | 25% | 25% |
Here's how the table works, using an example: A 45-year-old employee leaves her company after ten years and receives a severance payment of 25,000 euros. Previously, she received a gross salary of 250 euros per day. The contractual notice period was undercut by 90 days. Now the employment agency uses the table to determine the amount of the severance pay: In this case, it is 40 percent, which amounts to 10,000 euros.
The next step is to determine how long the employee would have had to work to earn this money. With a gross salary of 250 euros per day, that's 40 days. This means that the entitlement to unemployment benefit is not suspended for the full 90 days, but only for 40 days.
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