The name belies the fact that these two models of financial support for jobseekers are fundamentally different. While ALG I is an insurance benefit, ALG II is a state benefit for those in need.
Unemployment Benefit I
Anyone who has worked for a certain period of time and paid into the statutory unemployment insurance scheme has earned an entitlement to the ALG I insurance benefit, so to speak.
Unemployment insurance benefits are independent of the recipient’s assets. Reduction due to existing savings is not possible.
However, recipients of unemployment benefit I must take into account that income from secondary employment is offset against unemployment benefit. In addition, the part-time job may not exceed 15 hours per week, otherwise unemployment no longer exists, which also means that the entitlement to ALG I no longer applies.
Amount of benefits
The amount of ALG I is not a fixed sum, but depends on the previous earnings of the claimant. Those without children are entitled to 60% of their last net salary. If you have children, you receive 67% from the unemployment insurance fund.
In addition to these payments, contributions for health insurance, long-term care insurance and pension insurance are also covered. Even the costs of private health insurance are covered under certain conditions. This is the case for ALG I recipients who have already been insured for five years. However, contributions to private health insurance are covered at most up to the amount of contributions of a statutory health insurance.
The following applies to the pension insurance: Although payments continue to be made, the contributions are lower in accordance with the reduced income, which in turn affects the pension entitlement later on.
How long is a claim?
An employee is only entitled to unemployment benefit I if he or she has paid into unemployment insurance for at least 12 months within two years. And also the entitlement period is dependent on the duration of the deposit.
Unemployed persons over the age of 50 are entitled to a special provision, i.e. an extended period of entitlement:
Deposit (in months)
Unemployment benefit II
ALG II (better known as Hartz IV) is a state-funded basic income support for jobseekers. It is intended to ensure the livelihood of all those who receive little or no benefit from the statutory unemployment insurance scheme. Thus, employees are also entitled to ALG II if their salary is not sufficient to cover their living expenses.
In 2005, ALG II was introduced as a combination of unemployment assistance and social assistance. Since this is a state benefit, it is first checked before payment whether there is actually a claim or whether you are in need of assistance. Need for assistance exists. For this purpose, the total income and assets of the community of need are determined.
While so also the child benefit is counted as income, there are some financial reserves that must remain untouched when determining the assets. This includes forms of private old-age provision such as Riester or Rurup pensions.
Amount of benefits
For the payments of the ALG II there are fixed rule rates. For children – depending on age – different amounts are paid. The amount of the benefits is therefore dependent on the need group.
In addition, there is also the possibility to apply for additional needs. If a claimant is a single parent or has a disabled child to care for, this affects the amount of benefits, as does a claimant’s pregnancy.
In addition, the costs for accommodation or heating are also covered – always provided that they are within a reasonable range.
How long is the claimant entitled to?
The entitlement to ALG II exists as long as the recipient is registered as unemployed and is in need of assistance. However, strict conditions apply. Anyone who misses registration deadlines or does not make sufficient personal efforts to find employment runs the risk of having his or her benefits reduced.