Short-time work benefits (Kurzarbeitergeld, Germany)

In a company, a difficult economic situation or an unforeseeable event (such as the current COVID pandemic) can make it necessary to register short-time work and thus for employees to receive short-time work benefits. This allows employees to have the resulting loss of pay partly offset by this benefit.

Under certain conditions, companies can apply for short-time work for up to 24 months. As mentioned, a number of requirements must be met.

These include, for example:

- at least 10 percent of the employees in a company must have a loss of pay of more than 10 percent;

- employees must have used up positive time credits and overtime (with some exceptions).

Short-time work is applied for by the employer. Employees of a company do not have to take action themselves.

The amount of short-time work benefits

Employees receive 60 percent of their net pay as short-time work benefits. For employees with at least 1 child, the rate rises to 67 percent of their respective net pay.

If employees' net pay drops by at least half in a given month, further exceptions apply, namely

-from the 4th month of receipt, the benefit is 70 percent of the last net pay. For employees with at least 1 child, the benefit is 77 percent of the last net pay;

-from the 7th month of receipt, the benefit is 80 percent of the last net pay. For employees with at least 1 child, the benefit is 87 percent of the last net pay.

During short-time work, the employer receives full reimbursement of social security contributions until June 30, 2021. For the period from July 1 to December 31, 2021, the reimbursement of social security contributions drops to 50 percent if short-time work began by June 30, 2021.

Additional earnings and continuing professional training

If a side job already existed before the start of short-time work benefits, it has no effect on the amount of the benefit. This side income is not counted against it.

If a side job was taken up by the end of 2020, this additional income is not counted as long as the sum of the side income and any remaining actual pay does not exceed the short-time work benefit and any top-up amount. This rule has been extended until December 31, 2021.

The periods of lost work due to short-time work are meant to be used by employees for professional training. If an employee pursues professional training during short-time work, the regular reimbursement of 50 percent of social security contributions is no longer made dependent on the training covering at least 50 percent of the lost working hours.

Can marginally employed workers receive short-time work benefits?

Marginally employed workers do not have to be dismissed when short-time work has to be introduced in a company. However, marginally employed workers are not entitled to short-time work benefits.