Gründungszuschuss: Start-Up Grants for The Unemployed

For employees who recently lost their jobs; unemployed individuals and employees interested in going into self-employment, this is a grant you can apply for. As for the last group, you’ll need to apply a bit of skill to be legible.

What is it?

Gründungszuschuss is a start-up grant offered to the unemployed who want to take up self-employment. The grant is to cover living expenses and social insurance contributions for the first few months of self-employment

 

Who qualifies?

To qualify to get the Gründungszuschuss, one has to:

  • have at least 150 days’ entitlement to Arbeitslosengeld (unemployment benefit)
  • have the necessary knowledge and skills to carry out the occupation concerned
  • present to the Agentur für Arbeit (employment agency) a statement from a knowledgeable authority (e.g. a business plan approved by a Steuerberater, the IHK, Handwerkskammern, Fachverbände or Kreditinstitute ) that their self-employment is potentially sustainable.
Exeptions:

The Gründungszuschuss may be restricted to people:

  • whose entitlement to Arbeitslosengeld  is to be suspended under Sections 156-159 of Book III of the German Social Code (SGB III)
  • who reach pensionable age while still receiving the grant. (In such a case, they receive the grant until the month of their birthday)
  • who had received the grant within the last 24 months

 

Amount and duration

The start-up grant is paid out in two phases:

For the first six months –  the applicant can receive a grant matching their last unemployment benefit to cover living expenses plus €300 a month for social insurance. The €300 a month for social insurance can be paid for a further nine months if the claimant can demonstrate that they are actively trading and working for the business on a self-employed basis.

Einstiegsgeld (Initial financial support)

Individuals who are entitled to assistance and claim basic security benefits for job-seekers under Book II of the Social Code (SGB II) can receive initial financial support (Einstiegsgeld) to help them enter self-employment as a primary occupation or an employment relationship in which they pay compulsory contributions. The support is provided by the local job centre.

 

How to claim/amount

The initial financial support can be granted as a supplement to basic security benefits for job-seekers on taking up self-employment as a primary occupation or an employment relationship in which compulsory contributions are paid. There must be reasonable grounds to expect that the employment or self-employment will remove the need for assistance.

The amount of initial financial support is based on factors such as the length of unemployment and the size of the claimant’s household. The amount therefore varies from case to case. The grant is paid out for a maximum of 24 months. There is no legal entitlement to initial financial support.

 

Other assistance for self-employed individuals

Individuals who are entitled to assistance and who take up or carry on self-employment as a primary occupation can also receive loans or grants for the purchase of material resources (grants are limited to a maximum of €5,000). The material resources must be necessary and reasonable for the form of self-employment in question.

Individuals who are entitled to assistance and are already self-employed can also receive assistance for external advice and training in order, for example, to place the self-employed business on a more stable footing or to effect a change in focus.

The assistance is, however, subject to the self-employment being economically viable. There is no legal entitlement to the assistance.

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