Unemployed shortly before retirement: what to do?

Unemployment benefits are paid until the regular retirement age – and are often more favorable than an early retirement pension.


  • Claiming unemployment benefit instead of pension: What are the advantages??
  • Benefit 1: Unemployment benefit often higher than pension
  • Advantage 2: Unemployment benefit increases the pension
  • Advantage 3: no pension deductions
  • How long can I draw unemployment benefits at the age of 63??
  • Who is entitled to 24 months of unemployment benefits?
  • Can the employment agency send me into early retirement??
  • What rights and obligations do I have as a 63-year-old with regard to unemployment benefits??
  • If I am unemployed for a longer period, can I receive Hartz 4 at 64??
  • Change to pension usually "unreasonable
  • Hartz 4: Do I have to cancel my private pension or endowment insurance??

The current situation on the labor market is rather bleak. Especially older employees, who are affected by unemployment shortly before retirement, ask themselves whether they should return to work. Many of you are already entitled to an early retirement pension (pension at 63).

In most cases, however, there is a lot to be said for drawing unemployment benefits first. This refers to unemployment insurance benefits, also known as ALG 1, as opposed to unemployment benefit 2, which is paid by the job centers. We answer the most important questions.

Claiming unemployment benefits instead of a pension: What are the advantages??

For the entitlement to unemployment benefits, it does not matter whether you can already draw an old-age pension. If you lose your job at the age of 63 or 64, you are entitled to unemployment benefits in the same way as a younger employee. So – if you are already eligible for an early retirement pension – you have a free choice: you can either make yourself available to the employment agency and receive unemployment benefits or apply for pension. There are many arguments in favor of unemployment benefits.

Advantage 1: Unemployment benefits are often higher than pensions

Unemployment benefits are usually higher than the expected pension, especially for men who have earned well in their last years of work and have acquired correspondingly high entitlements to unemployment insurance through their insurance contributions.

This often applies to women as well, because women have lower pension entitlements on average. Even if they were last employed only part-time, the unemployment benefit is often at least as high as the pension.

Before you decide to apply for an early retirement pension, you should take a look at your current pension information letter. From this you can see what pension you can expect to receive.

Advantage 2: Unemployment benefit increases the pension

If you do not retire early and remain registered as unemployed, the unemployment period also counts as insurance time . The time spent receiving unemployment benefits is worth 80 percent of what the previous period of employment was worth for the pension.

For an unemployed person with an average income before becoming unemployed, two years of unemployment benefit – the length of time for which many older people can claim the benefit – will result in an increase of about 55 euros in the subsequent monthly pension. For an unemployed person who was last among the higher earners, two years of unemployment benefit later can even bring a pension increase of up to almost 115 euros.

Advantage 3: no pension deductions

Retirement two years early is often "penalized" with pension reductions of 7.2 percent – for life. However, this does not apply to the old-age pension for particularly long-term insured persons.

How long can I draw unemployment benefit at the age of 63??

You can receive unemployment benefits for a maximum of 24 months and at most until your regular retirement age. In principle, an unemployed person is entitled to unemployment benefits until he or she reaches the age "required for the standard retirement age within the meaning of the Sixth Book" (Section 136, Paragraph 2 of the Third Social Security Code).

This means: With the gradual transition to retirement at 67, the age limit for unemployment insurance is also being raised step by step.

For example, if you were born in 1957, your regular retirement age is 65 years and eleven months. As of the following month, you are no longer entitled to unemployment benefits. This also applies if your maximum entitlement of 24 months has not yet been exhausted.

Pension start calculator

Calculate for yourself when you can retire at the earliest and without deductions.

Who is entitled to 24 months unemployment benefit?

This maximum period applies to all those who are at least 58 years old when they apply for unemployment benefits.

Another requirement is that you can prove four years of contributory employment within the last five years before applying for unemployment benefit.

Can the employment agency send me into early retirement??

No. This can only happen with unemployment benefit 2 (Hartz 4). Whether a claim to a pension already exists is none of the employment agency’s business when it comes to the insurance benefit unemployment benefit 1.

However, it is different if you already draw the full retirement pension. The entitlement to unemployment benefit "rests" during the period in which you are "entitled" to an old-age pension from the statutory pension insurance (Section 156, paragraph 1 of the Third Social Security Code).

What rights and obligations do I have as a 63-year-old with regard to unemployment benefits??

No special regulations apply to you. Even as an older person, you must make yourself available to the employment agency and accept all reasonable jobs. As far as the legal regulation.

However, it is questionable whether the employees of the employment agencies place a special emphasis on the placement of older unemployed persons during corona times.

However: As a rule, a longer vacation is not possible for you as a recipient of unemployment benefits. However, you can go on vacation for up to three weeks (21 calendar days) per year with the approval of the employment agency.

This entitlement to "permitted absence from work" refers to calendar years and not to years of benefit receipt according to the "accessibility order" of the Federal Employment Agency. Whether you also took vacation in the same calendar year in your last job does not matter.

If you want to go away for longer, you can take three weeks of additional leave. During these additional weeks, however, there is no more unemployment benefit.

If you go on vacation without permission, you must expect that your unemployment benefits will be canceled.

Pension appraiser

The pension estimator helps you to estimate how high your later pension may be in different scenarios.

If I am unemployed for a longer period, can I receive Hartz 4 at 64??

It all depends. With this means-tested benefit, there is no completely free choice between Hartz 4 (unemployment benefit 2) and pension.

If you start receiving Hartz 4 at age 63, you may be required to take an early retirement pension to avoid needing assistance. If you do not do this, the job center can ask you to apply for early retirement and then make the application itself if you still do not "cooperate". This was ruled by the Federal Social Court on 19.8.2015 decided (file number B 14 AS 1/15 R K).

This is based on a provision in the Second Social Security Code (SGB). Paragraph 12a SGB II states:

"Benefit recipients are obligated to claim social benefits from other institutions and to file the necessary applications, provided that this is necessary to avoid, eliminate, shorten or reduce the need for assistance."

Change to the pension usually "unreasonable"

In practice, a change to the pension is often considered unreasonable, because the early retirement pension that you would receive would, under certain circumstances, barely exceed the basic security level. This is regulated in the so-called Unbilligkeitsverordnung (Ordinance on Unfairness). According to this, the request to apply for a pension is "unreasonable" "if beneficiaries would thereby become in need of assistance in the sense of basic security in old age and reduced earning capacity".

This regulation is intended to prevent you from being transferred from Hartz 4 to old-age social assistance. If you are asked by the job center to apply for a pension at the age of 63, you should therefore submit up-to-date pension information to the job center. If you only have low pension entitlements, the office cannot oblige you to apply for a pension.

Even if you are still socially insured employed or self-employed and receive supplementary unemployment benefit 2, you may not usually be referred to a pension application. However, the gainful employment must "take up the predominant part of the labor force".

The same applies if you can present an employment contract or a binding promise of employment that shows that you will take up gainful employment "in the near future". All this is stated in the Unfairness Ordinance.

Hartz 4: Do I have to cancel my private pension or endowment insurance??

If it is foreseeable that you will soon receive Hartz 4, you should contact your private insurance company in good time. It may make sense to amend your contract to make it impossible to terminate it before you reach your regular retirement age.

In this case, you are entitled to an allowance for old-age reserves in the amount of 750 euros per year of life. If you are 63 years old, the insurance may thus be worth (63 x 750 euros =) 47.have 250 Euro. For married couples, double the amount applies.

In addition, in the current Corona crisis, more generous rules apply to the asset test anyway.

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