Employers call for 12-month cap on German unemployment benefits

Germany’s employers are calling for unemployment insurance payments to be limited to 12 months for everyone who loses a job.

Under current rules, people under 50 can receive payments for up to a year, while older workers can qualify for longer periods, up to two years.

This insurance is for people who have paid into the system through work; it is separate from state-funded basic income support.

The employers say a shorter limit could save up to €2 billion a year in the insurance system and help people return to work sooner.

Germany’s Federal Employment Agency expects a deficit of nearly €10 billion in 2026.

Researchers warn that older people may have more difficulty finding jobs, which could increase spending on basic income support instead.

The government’s current draft does not include a cut, and the proposal is being discussed by a Bundestag committee.