The job is gone - and a severance payment is intended to help mitigate financial losses and the loss. If there is already the prospect of a new employment relationship immediately, those who have been made redundant can look forward to the additional sum of money without restriction. But what do you need to bear in mind if you have to apply for unemployment benefit after being made redundant and want to ensure that the severance payment can really fulfill its purpose?
Giving up work instead of resigning - periods of ineligibility for unemployment benefit
In principle, employees are only entitled to unemployment benefit if the employment relationship has been terminated by the employer. However, if a termination agreement with severance pay is offered if employees leave their job before the end of the statutory or contractually agreed notice period, this often results in financial disadvantages.
When are blocking periods generally possible?
According to § 159 Para. 1 Sentence 1 No. 1 SGB III, a blocking period of twelve weeks is to be imposed if the employment relationship has come to an end due to the employee's own termination or through their own fault. This is also the case, for example, if a legally binding notice of termination is issued due to grossly negligent or willful breaches of the employment contract or other behavioral reasons such as theft or similar.
If a termination agreement is concluded in order to avoid ordinary or extraordinary dismissal, it is to be expected that a blocking period will be imposed on the receipt of unemployment benefit. Whether a severance payment is paid or its amount is irrelevant. The only decisive factor for the employment agency is whether or not the employee agreed to the termination of the employment contract before the end of the statutory notice period.
By agreeing to the termination agreement, the employer has not exhausted all his options that would have been available to him in the event of dismissal through the expiry of a notice period or through a successful action for unfair dismissal. From the point of view of the employment agency, he has therefore made himself unemployed.
Exceptions for termination agreements
However, there are a few special cases in which the signing of termination agreements does not lead to suspension periods. However, there must be important reasons for this, which result from the technical instructions of the Federal Agency with regard to the implementation of § 159 SGB III "Suspension during blocking periods".
Exceptions include the conclusion of a termination agreement in cases where a notice of termination would have been given in due time in any case. Operational and personal reasons, which would necessarily result in a dismissal, can also contribute to the avoidance of blocking periods. Operational reasons include, for example, dismissals due to plant closures. Personal reasons may include an employee's ongoing illness.
A termination agreement does not result in a blocking period even if the termination date specified in the agreement coincides with the statutory notice period. However, a blocking period is always imposed if the employee could not be dismissed by ordinary means, as may be the case if the employee has been with the company for a long time. Likewise, a settlement reached before the labor court can result in employees escaping the blocking period for unemployment benefit.
However, as is always the case in legal matters, other aspects may arise in individual cases. We will be happy to clarify what will apply to you and a prospective termination agreement in a personal meeting, taking into account your individual circumstances. This will ensure that you are not affected by a blocking period and a possible deduction of a severance payment.
Termination agreement and dismissal - offsetting severance payments
If notice of termination is given by the employer, severance payments are not offset against unemployment benefit. The severance payment remains with the employee even if the termination agreement meets the aforementioned exceptional reasons.
In other cases, the entitlement to unemployment benefit may be suspended. The requirements for this are regulated in § 158 SGB III. One of the resulting principles for the offsetting of severance payments is that the severance payment is offset for the period between termination and the normally applicable termination date. The start of payment of unemployment benefit is therefore delayed to a certain extent.
Advantages and disadvantages of offsetting a severance payment
This has two important consequences for employees: If the period of unemployment is only short, the entire entitlement to unemployment benefit is not exhausted. However, the financial advantage that the severance payment could offer as additional income is lost.
If unemployment lasts beyond the individually calculated period in which unemployment benefit is paid, the bottom line is that no amount of the severance payment remains. However, the offset provides a time buffer until you have to switch to the citizen's allowance.
Partial crediting of a severance payment
There are also differences in how severance pay is offset against unemployment benefit. Section 158 para. 2 SGB states that the calculation method that is most favorable for the employee must be chosen. § Section 158 para. 2 sentence 2 SGB III provides for a 60 percent rule for offsetting. In addition, special rates apply depending on age and length of service; the older an employee is and the longer they have been with the company, the lower the proportion that can be offset.
Here too, we are your contact partners who will provide you with competent and comprehensive advice in your personal case.
