Blocking periods/suspension periods for unemployment benefit

In order to understand the system of suspension and inactivity periods, it is helpful to first understand their meaning and purpose. Unemployment benefit is insurance against involuntary unemployment. As with any insurance benefit, this also entails certain behavioral obligations on the part of the policyholder. This includes the insured person's obligation not to become unemployed unnecessarily.

The blocking period is based on the fundamental idea that the community of insured persons must defend itself against cases of risk for which the insured person himself is responsible or which he has not helped to remedy without good reason. It is intended to protect the community of contribution payers from the risk of unemployment being manipulated by burdening the insured person with part of the expenses that they have caused the insurance community through their behavior. A blocking period is therefore intended to sanction misconduct by the policyholder in breach of the contract, provided there was no good reason for it. This is intended to prevent such misconduct from occurring in the first place or at least from being repeated.

The imposition of a suspension period, on the other hand, does not constitute a sanction. It is merely intended to ease the burden on the public purse by bridging a period during which the employee is still receiving benefits from the employment relationship, such as vacation pay, and is therefore not dependent on unemployment benefit as support. Double benefits should be avoided. It is also important to prevent manipulation to the detriment of unemployment insurance. Without Section 158 SGB III, the employer and employee could terminate the employment relationship at an earlier date and agree an increased employer benefit designated as severance pay until a later date instead of the pay - which would lead to the suspension of the unemployment benefit entitlement in accordance with Section 157 (1) SGB III. § Section 158 SGB III therefore only applies if the employee is granted a severance payment or similar benefit upon termination of the employment relationship and the deadline for ordinary termination by the employer has not been met.

A fundamental distinction must be made between a blocking period and a suspension period. Both of these initially have the effect that unemployment benefit is not paid for a certain period of time. However, the blocking period means a sanction for the unemployed person, while the suspension period is merely intended to relieve the public purse for periods in which the unemployed person is (still) receiving benefits elsewhere.

The suspension period delays the start of unemployment benefit payments. However, the entitlement period is not shortened, it just starts later. So if you are entitled to 52 weeks, you will ultimately receive 52 weeks.

No unemployment benefit is paid during a suspension period either (the entitlement is also suspended in this respect), but the entitlement period is shortened by the suspension period, see § 148 SGB III. If you have an entitlement of 52 weeks and a blocking period of 12 weeks, you will actually only receive unemployment benefit for 40 weeks.

The regulations on blocking and suspension periods can be found in Sections 156 - 160 of the German Social Code III (SGB III).

Section 157 SGB III contains more detailed regulations on the suspension period during the entitlement to remuneration or leave compensation.

Section 158 SGB III sets out the requirements for the suspension period in the case of redundancy payments in connection with the termination of the employment relationship.

A suspension period occurs in particular if the unemployed person is still entitled to benefits from the previous employment relationship and is therefore not necessarily dependent on unemployment benefit. The entitlement to unemployment benefit is suspended, among other things, if there is an entitlement to other social benefits such as wage replacement benefits due to sickness benefit, injury benefit, maternity benefit, transitional benefits or a reduced earning capacity or old-age pension. Such a suspension period also occurs during industrial action.

a. Rest period with entitlement to remuneration or vacation compensation

As the public purse should ultimately be spared as much as possible, the unemployed person is initially obliged to make a living from the income to which they are entitled. Unemployment benefit only comes into play when this pillar breaks down. The entitlement to unemployment benefit I is therefore suspended for the period in which the unemployed person still receives or can claim remuneration. The same applies if the policyholder receives compensation for vacation not taken due to the termination of the employment relationship.

b. Suspension period for termination agreements

Entitlement to ALG I is also suspended if the Employment relationship through a termination agreement is terminated in the context of which the employee receives or can claim a severance payment, compensation or similar benefit (redundancy payment) and the applicable ordinary notice period is not observed, Section 158 SGB III. In these cases, the entitlement is suspended until the date on which the employment relationship would have ended if the applicable ordinary notice period had been observed or on which the employer could have lawfully terminated the employment relationship for good cause.

ATTENTION in the case of ordinary permanency

If ordinary termination of the employment relationship by the employer is excluded - e.g. due to collective bargaining agreements - the law provides for a notional notice period of 18 months in Section 158 para. 1 no. 1 SGB III.

If the employment relationship can only be terminated with notice if compensation for dismissal is paid, a notional notice period of one year applies.

Upper limit 60 %:

Pursuant to Section 158 para. 2 sentence 2 no. 1 SGB III, the suspension period is limited by the date up to which the unemployed person would have earned an amount equal to 60 % of the dismissal compensation to be taken into account pursuant to Section 158 para. 1 SGB III if he had continued to receive the remuneration earned each calendar day during the last employment relationship.

Here is a brief example to illustrate this:

The employment relationship of an employee who cannot be dismissed under the collective agreement is terminated by means of a termination agreement. He receives a severance payment of EUR 100,000. He had received remuneration of EUR 300 per calendar day (not working days).

Normally, the entitlement to ALG I would be suspended for one year. However, this period is shortened by the 60 % rule.

60 % of the EUR 100,000 corresponds to EUR 60,000. The policyholder would have earned this sum with 200 working days (EUR 300/AT x 200 AT = EUR 60,000). This corresponds to a working period of 40 weeks. Accordingly, this policyholder's entitlement to unemployment benefit is only suspended for 40 weeks instead of one year (= 52 weeks).

This duration may be reduced again if the employee has been working in the company for a longer period and/or has reached the age of 35, in which case the 60 % are reduced by 5 % in each case

• for every 5 years of service and/or
• for every 5 years over the age of 35.

So if you have been working for the company for 6 years and are 41 years old, you only have to earn 50 % of the severance payment amount divided by your calendar day's pay in order to end the retirement period. In the example case, this would be 50,000 euros. Accordingly, the rest period would be reduced to approx. 167 working days (=33.4 weeks).

These calculations are often very complex. It is therefore advisable to seek advice from an experienced employment law specialist to avoid unpleasant surprises.

Absolute maximum resting limit:

The absolute maximum period of suspension is one year, Section 158 (2) sentence 1 SGB III.

c. Suspension period for terminations

Suspension periods may also occur in the event of termination by the employer. This can occur in situations in which the employer does not comply with the relevant notice period, but the termination can be reinterpreted as a termination with notice. In these cases Filing an action for unfair dismissal Although the termination cannot ultimately be averted, the termination of the employment relationship can be postponed (to the date of termination in accordance with the notice period). On the other hand, anyone who accepts the shortened notice period must also expect to be granted a period of suspension until the end of the lawful notice period.

The resting of the Entitlement to unemployment benefit during a suspension period is always threatened if the person concerned has acted in breach of contract without good cause.

a. Reasons for a blocking period

The most common reason for a qualifying period is giving up work. The employee resigns themselves or gives cause for the termination of the employment relationship (e.g. provoked termination by the employer) and thereby causes unemployment through gross negligence or even deliberately.

However, accepting an unlawful dismissal can also lead to a blocking period, as can the conclusion of a termination agreement.

The blocking period is usually 12 weeks.

A shortened blocking period of 3 or 6 weeks is possible where the employment relationship would have ended in the near future anyway, in the event of particular hardship and in the event of first-time violations in the form of

• Rejecting job offers;
• failure to appear for an interview;
• Rejection of a company integration measure; or
• Rejection of an integration course or premature termination.

However, there is also a blocking period, albeit a shorter one, if the employee makes too little effort to apply for a job (2 weeks) or if the employee registers as a jobseeker too late (one week).

b.Special features in the case of self-termination, termination agreement and behavioral termination by the employer

Particularly in cases where you intend to terminate your employment or conclude a termination agreement, you should seek advice from an experienced employment law specialist beforehand.

A blocking period does not apply if the employee has an important reason for terminating the employment relationship. It is often difficult to say whether there is good cause. A classification aid is provided by the technical instructions of the Employment Agency on § 159 SGB III. For example, good cause regularly exists if the employment relationship cannot be continued for health reasons or if there is a risk of damage to health, for example due to bullying.

However, you must regularly prove the existence of such good cause to the employment agency. A specialist lawyer for employment law can significantly increase your chances of successfully providing evidence.

According to supreme court rulings, there is also no blocking period in the case of termination agreements if:

• the job would have been lost anyway due to dismissal for operational or personal reasons and
• the existing notice period between signing and termination is observed and
• a severance payment of at least half a month's earnings per year of employment is paid.

There is no insurance cover for social insurance during a suspension or rest period. In accordance with § 19 Para. 2 SGB V, there is subsequent insurance cover for up to one month, but as health and long-term care insurance are compulsory, you must then take out your own insurance.

If you can receive Hartz IV benefits for this period, your compulsory insurance contributions will also be paid. If you are not entitled to such benefits, for example because you have too many assets, you will have to pay the insurance contributions yourself.

If you intend to resign or conclude termination agreements or labor court settlements in dismissal protection proceedings, knowledge about the handling of unemployment benefits is essential. This applies all the more as neither the Federal Employment Agency nor the employer is obliged to inform the employee about his obligations under employment promotion law. The employee must inform himself!

Seek professional advice at an early stage to avoid unpleasant surprises later on.

Do you have questions or problems relating to employment law? Do not hesitate to contact our law firm. We will help you quickly, competently and throughout Germany with all employment law issues and represent you assertively. Give us a call or write to us using the contact form:

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