Your employer is experiencing payment difficulties and therefore owes you remuneration. If a so-called insolvency event then occurs, you are entitled to insolvency benefits from that point on. Such an insolvency event may be, for example, that insolvency proceedings are opened against your employer. You can use the insolvency benefit to compensate for your loss of wages for a maximum of 3 months.

Insolvency benefits are paid retroactively. The obligation to pay unemployment insurance contributions is not a prerequisite. Part-time employees, interns, students, pensioners and trainees can receive insolvency benefits. In the case of, for example, managing partners, shareholders of a limited liability company or relatives of the employer, proof of employee status must be provided in order to be entitled to insolvency benefits.

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 was terminated before, the insolvency benefit period includes the last 3 months of your employment.

You will receive exactly as much insolvency benefit as you last earned in net wages. However, the income threshold for unemployment insurance is the upper limit. The extent to which special payments (e.g. Christmas bonus) can be replaced by insolvency benefits depends on the provisions in your employment contract and must be examined on a case-by-case basis.

If your employer does not pay social security contributions due to the 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 before the insolvency event.

You can find more information on the website of the Federal Employment Agency.