Your employer is experiencing payment difficulties and therefore owes you your salary. If a so-called insolvency event then occurs, you are entitled to insolvency benefit from this point onwards. Such an insolvency event can be, for example, the opening of insolvency proceedings against your employer. You can use the insolvency money to compensate your loss of earnings for a maximum of 3 months.

Insolvency benefit is paid retroactively. You are not required to pay unemployment insurance contributions. Part-time employees, interns, students, pensioners and trainees can receive insolvency money. For example, managing partners, shareholders of a limited liability company or relatives of the employer must prove that they are employees in order to be entitled to insolvency money.

You can only receive it for the wages that were not paid to you in the last 3 months of the employment relationship before the insolvency event. If your employment relationship was terminated beforehand, the insolvency benefit period covers the last 3 months of your employment relationship.

You will receive exactly as much insolvency money as your last net salary. However, the contribution assessment ceiling for unemployment insurance is the upper limit. The extent to which special payments (e.g. Christmas bonus) can be replaced by insolvency money depends on the provisions in your employment contract and must be checked on a case-by-case basis.

If your employer does not pay social security contributions due to insolvency, the employment agency will do so at the request of the collection agency (health insurance fund). Outstanding contributions will be paid for the last 3 months of your employment relationship prior to the insolvency event.

Further information can be found on the website of the Federal Employment Agency.