Employees who take up full-time self-employment to terminate their unemployment might be entitled to a start-up grant for securing a livelihood and for social security in the period after start-up. A direct transition from employment to subsidised self-employment is not possible.

Start-up grant

The start-up grant is a discretionary benefit of active employment promotion. No legal entitlement exists to this benefit.

The start-up grant can be granted if the employee is entitled to unemployment benefit in accordance with Book Three of the German Social Code (SGB III) until taking up self-employment.
If you enter a period of suspension of benefits while receiving unemployment benefit, e.g. due to giving up work or belated report as job-seeking, no start-up grant will be granted for this period. For further information on periods of suspension of benefits, please refer to the bulletin for unemployed persons (bulletin 1, section 6).

When taking up self-employment, founders must be entitled to at least 150 more days of unemployment benefit, the duration of which is not only based upon Section 147 Subsection 3 SGB III. Furthermore, they must prove the necessary knowledge and abilities to work self-employed. If the aptitude cannot be established clearly, the applicant might have to participate in a measure for the determination of aptitude or for the preparation for founding a new business.

You must prove the viability of the start-up to the employment agency. For this, you must provide an appropriate statement from an expert authority. Expert authorities are chambers of industry and commerce, chambers of crafts, professional organisations, expert associations and financial institutions.

Amount, duration and payment conditions of the start-up grant

The start-up grant is granted in two phases. For six months, the amount of the unemployment benefit last received for securing a livelihood and € 300 for social security are granted. € 300 per month can be granted for another nine months for social security if intensive business operations and full-time business activities can be proved.

Subsidised persons who have completed the age for the entitlement to regular pensions in the sense of Book Six of the German Social Code can no longer receive start-up grants as of the beginning of the following month. A renewed subsidy is only possible if since the end of a promotion of self-employment at least 24 months have passed.

Entitlement to unemployment benefit

The duration of entitlement to unemployment benefit diminishes by the number of days for which a start-up grant equivalent to the last amount of unemployment benefit received has been paid.

For self-employed persons, there is the possibility of compulsory insurance on application in unemployment insurance. Information can be obtained from the "Notes on compulsory insurance on application in unemployment insurance".