Briefly explained
Who is entitled to the start-up grant
The minimum requirements
All recipients of unemployment benefit 1 who still have a remaining entitlement of at least 150 days or 5 months are potentially entitled to the start-up grant. This means that at least 150 days of the originally approved unemployment benefit must still be left, i.e. exactly 5 months of unemployment benefit must still be available.
Bruno Schäfer
Are you determined to start your own business, but feel overwhelmed by all the processes, details and documents?
Everything can, nothing must
This means that it is at the discretion of the employment office whether the subsidy is granted or not.
This is due to the fact that placement in an employment relationship always has priority. Self-employment, on the other hand, is of secondary importance, i.e. if no suitable position is found during the application process or if the customer is “unplaceable”, the option of self-employment may be considered.
Entitlement to unemployment benefit 1
In Germany, all employees who have worked full-time for at least 12 months in the last 24 months are entitled to 12 months of unemployment benefit 1. It does not matter whether the 12 months were worked consecutively or for one or more employers. The important thing is that you have worked for a total of 12 months.
As soon as someone leaves their current employment relationship, whether by resigning or being made redundant, the Federal Employment Agency must first be informed of the (impending) unemployment in order to receive unemployment benefit and you must register as a jobseeker (by telephone or online).
You then have to register as unemployed on the first day of unemployment (usually in person) at the relevant employment office. Then, a few days later, you will receive a notice of assessment by post stating the amount (60% or 67% (with a child) of your last gross salary) and the duration of your unemployment benefit.
Formally speaking, you can now apply for the start-up grant. But there are still a few hurdles to overcome first. In the next chapter, we will take a look at exactly what these are.
From the ALG 1 assessment notice to the application for a start-up grant
As soon as someone is unemployed for the first day and receives unemployment benefit 1 (notice of assessment sent by post) and also has at least 5 months remaining entitlement to unemployment benefit 1 (usually 12 months at the start of receipt), it is now theoretically possible to apply for the start-up grant.
In practice, however, things work a little differently. It usually looks like this: after the assessment notice for ALG 1, you are invited to an initial interview/integration meeting with a person from the employment office.
This interview is about getting to know each other. Here you describe the reasons that have led to your current unemployment and what plans you have to end it as quickly as possible. The other party will introduce themselves and the process of working together and see what they can do to help you find a job again as quickly as possible.
ATTENTION: If you want to set up a business and receive a start-up grant, the initial meeting with the office is extremely important.
This is because the job of the administrative office is to place you back into employment. (Edit 01.01.23: The Federal Government has decided to abolish the placement priority according to § 4 SGB III for the start-up subsidy. This will make it easier for start-ups to apply for a grant to open their own business in future)
How to convince the decision-makers
Here you have to argue very well in order to convince the other side of your intention to become self-employed full-time – we always give our founders helpful tips and tricks to “survive” this conversation or to manage to convince the processing department to go along with and promote the path to self-employment.
This step is extremely important, as the administrative department is the body that decides whether you get the first thumbs up on your way to the start-up grant in the form of a general willingness to support your self-employment.
In practice, this means that from this point onwards you will normally no longer have to write any or fewer applications, and you may be granted and paid for business start-up coaching to prepare you for self-employment (why this is important – more details in the AVGS chapter – Business start-up coaching measure) and receive the application for a start-up grant.
You can proceed as follows with regard to the structure of the conversation:
- First describe your business idea, which you are 100% convinced of.
- You now know the “what”, but you still need professional help with the “how”, i.e. developing a clear concept, a strategy, a roadmap and other important topics in the area of business start-ups.
- That’s why you would like to take part in individual coaching for business start-ups. And for this coaching you need the appropriate AVGS voucher (employment and placement voucher).
- Be polite but persistent and don’t let yourself be brushed off with sayings like: We don’t support that!
- You have already proactively found a suitable training provider and coach for the coaching, an initial meeting has already taken place where the content and requirements of the coaching were also discussed.
- After the interview, you can send the written application for an AVGS and other documents (you will receive them from us) to your case officer by email.
- Then you have to wait and hope that the coaching will be funded and you will receive a voucher.
As part of the coaching, we then have the time to optimally prepare you for full-time self-employment, prepare documents such as a business plan and apply for funding from the employment office for start-ups (start-up grant) and work on all other important topics.
