Unemployment Benefit II (SGB II)

If you don’t generate sufficient revenue, and if you are not or no longer entitled to ALG I, you may apply for ALG II (Unemployment benefit II) at your local job center or ARGE. The job center will then determine if you are entitled to benefits.

If you form a benefits community (Bedarfsgemeinschaft) jointly with other members of your household, the application applies for the other persons with whom you live.

Benefits in accordance with SGB II comprise benefits for standard needs, additional needs and needs for accommodation and heating. The subsistence allowance for single persons, single parents, adults with minor partners is currently 416 € per month (as of 01.01.2018). A so-called additional need can be considered for needs that are not covered by the standard need.

You can continue your self-employed work as a recipient of ALG II, but you must conform to the general rules which often inhibit self-employed work. This will be at the discretion of your case manager. It is not as easy to deregister and register again as it is when you are a recipient of ALG I.

On the basis of the self-employment income you stated, your job center will calculate your income that is to be considered by deducting the applicable deductions and allowances from the income you stated.

Einstiegsgeld (integration bonus)

The long-term goal of being capable of sustaining yourself from self-employed work is defined in a so-called “integration agreement”.

If you wish to start up in self-employment, but do not have sufficient funds for this, then you can receive Einstiegsgeld (integration bonus). The personal adviser at the job center decides whether an integration bonus is required, and how much the subsidy should be.

As a rule, half the ALG II rate is initially granted for half a year. The maximum extension two years.  There is no legal claim to the subsidy. It is not possible to obtain a voluntary unemployment insurance are not possible as a recipient of ALG II.

You can continue to be insured with the KSK as a recipient of ALG II if you are self-employed. This will eliminate the need for a new application when you stop receiving the subsidy. If you receive ALG II benefits for a prolonged period of time, the KSK may request proof of self-employed artistic or creative activities.

As the legal requirements for applying for ALG II and for offsetting your additional income are very complicated and can lead to very different results in individual cases, reference should be made to the regional counseling services offered by unemployment initiatives or associations.

Sources: Hubatscheck, Bernd: "Existenzgründung", http://www.mkk-consult.de , retrieved December 2018 and  www.arbeitsagentur.com, retrieved November 2018.