The economic situation in Germany is bad. The effects of the pandemic can still be clearly felt everywhere. The situation on the labor market is also tense and older workers in particular are losing their jobs. But what happens if you suddenly become unemployed at the age of 55? Do I have to use up my savings or sell my home?
Do I get unemployment benefit or citizen’s benefit?
As soon as you have received the letter of termination, the first way leads to the job center. Anyone who has previously worked in a job that is subject to social security contributions is usually entitled to unemployment benefits. These benefits are funded by previously paid unemployment insurance contributions. The amount of the unemployment benefit is calculated according to the last earnings. An amount of 60% of the last net earnings applies as a guideline. Persons who have not made sufficient contributions are not taken into account within the unemployment insurance. If these people are considered to be in need and also meet all other citizen income rules, then they are entitled to citizen income as an alternative. The citizen’s income is paid regardless of the last net salary and depends on the necessary financial means for subsistence. In addition, heating costs and rent are taken into account. Under certain circumstances, the benefit recipient is also entitled to an additional requirement. Citizens’ income is not financed from social security contributions, but from taxpayers’ money. It is a kind of basic security for people who are still available for the labor market. If the unemployment benefit does not cover the cost of living, you can apply for citizen benefit in addition to the unemployment benefit.
What happens to my savings?
Anyone who suddenly becomes unemployed at the age of 55 is often afraid of losing their savings and assets. But it’s not that fast. Thanks to the waiting period introduced for citizen income, there are also no sanctions. However, the decisive factor here is whether you are entitled to unemployment benefits. Unemployment benefit is an insurance benefit that you receive because you have previously paid unemployment insurance contributions. If you receive unemployment benefits, you don’t have to worry about your assets. Only when the entitlement to unemployment benefit expires and the beneficiary switches to citizen benefit (unemployment benefit II until January 2023) may he have to use his realizable assets. However, there is a waiting period and there are also statutory allowances. However, there are exceptions if the usable assets are to be regarded as significant. The law defines significant assets according to the community of needs. The unemployed person who changes from unemployment benefit to citizen’s benefit is considered the first person entitled to benefits within the benefit community. Your assets may not exceed the amount of 40,000 euros. For all other people who live in the community of need, there is an allowance of 15,000 euros per person. After the waiting period has expired, the allowance of EUR 15,000 also applies to the first beneficiary within the benefit community.
What counts as wealth?
The property related to the receipt of citizenship benefit refers to all things belonging to the beneficiary that can be recognized as money. The objects must be measurable in the form of money. Measurable refers to cash, stocks, savings bonds and savings accounts. Jewellery, antiques, paintings and vehicles are considered valuable objects. Capital life insurance, insurance investments and real estate are also financial benefits that must be taken into account. However, there are exceptions for real estate and life insurance. If the life insurance is a form of mortuary insurance and the benefit from it is used solely to cover funeral expenses, then the insurance is not considered an asset. However, proof is required here. The same applies if the life insurance is used for old-age provision. Real estate and land only become interesting after the waiting period has expired. During the waiting period, they are not considered to be significant assets. According to this, real estate is only taken into account if it is not used as residential property. However, there are restrictions on the use of the property. The specified rules apply to a community of needs of four people. Within this community of need, your own house may not exceed the living space of 140 square meters. A maximum area of 130 square meters applies to condominiums. The living space increases by 20 square meters for each additional person living within the community of need. In general, however, the job centers are instructed to take individual circumstances into account. In cases of hardship, larger living areas are also accepted.
Anyone over 55 who becomes unemployed should not lose heart. In Germany there is a shortage of skilled workers and qualified employees with professional experience have a good chance of finding a new job. From the middle of the year, the new citizens’ allowance laws, which are intended to bring people back to work through efficient means, will also take effect. No one loses their assets immediately and you may find a new job within the waiting period.
