Hartz IV for the Self-employed – Arbeitslosengeld II for Self-employment

Hartz IV und SelbständigkeitThe right to benefits under the Social Security Act (SGB II) is not only for those who are able to work and work as employees but also for the self-employed. Hartz IV recipients can, in principle, pursue any independent activity. This also means that in the case of self-employment, the Arbeitslosengeld II is entitled if the income earned is not enough to cover the cost of living. On this page, we will answer the most important questions about the Arbeitslosengeld II (unemployment allowance) and the possibilities of support for self-employment.

Income from self-employment or ancillary income is even expressly desired as this increases the chance of complete reintegration into the labor market. There is no upper limit for the weekly working hours of 15 hours (Arbeitslosengeld I, SGB III) when drawing Arbeitslosengeld II (SGB II).

Crediting income from self-employment

In the calculation of the Arbeitslosengeld II, the jobcenter basically does not distinguish between unemployed jobseekers and self-employed individuals. The level of the ALG II entitlement is therefore based on the current requirements, taking account of the applicant’s entitlements and assets. The claim is thus calculated as follows:

  1. Determination of the monthly control performance of up to € 409 (as of 2017) per person of the community of need plus housing costs.
  2. Offsetting private assets (eg “inappropriate” real estate, vehicles or old-age security deposits above statutory freedoms) and consumption of the resulting income.
  3. Determination of monthly net income (revenue / gross income minus operating expenses / advertising costs and taxes and insurance).
  4. Reduction of the revenue surplus, taking account of the free allowance for employed persons.
  5. Deduction of the resulting residual amount from the amount of the individual control capacity from 1.

The legal foundations are laid down in the following laws and regulations:

Promotion of Hartz IV and self-employment

The founding grant in the Third Book of the Social Code (SGB III) serves the self-employed to secure livelihood and social security in the first period after its founding. The assistance is granted as a dissatisfaction benefit in two phases:

  1. Phase of six months: Self-employed persons can receive a subsidy amounting to the previous individual unemployment allowance plus a monthly lump sum of 300 euros for social security.
  2. A period of nine months: the monthly social security allowance of 300 euros can be extended if full-time business is demonstrated and the extension is deemed appropriate.

Important: Self-employed individuals must prove that they have the knowledge and abilities to carry out the self-employed activity. In addition, applicants must submit a viable business plan, which can be confirmed by a specialist body (e.g., chambers of commerce or tax consultants).

Start-ups assistance in detail

The following applies in principle: Arbeitslosengeld II (“Hartz IV”) and start-up allowance can be obtained at the same time. The following grants may be requested by independent Hartz IV recipients if they meet the requirements:

  • In order to apply for a subsidy with an entrance allowance according to § 16b SGB II, one must be able to work, be entitled to the right to work and to be unemployed in the sense of SGB II. The competent job center decides on the entitlement, duration and scope of the services. The allowance for the entrance allowance is paid for a maximum of two years in addition to the Arbeitslosengeld II. As a rule, the subsidy amounts to 50 per cent of the regular benefits from the Arbeitslosengeld II. An extra 10% may arise for each additional person of the community of need. There is no legal claim to this promotion, which is why the responsible job center decides on the entrance fee.
  • In addition, it is possible to apply for loans and grants in the form of benefits in accordance with § 16c SGB II, insofar as these are necessary and appropriate for the exercise of an person’s independence.
    • Appropriate grants can be granted up to an amount of EUR 5,000.
  • Self-employed people may also apply for assistance and exchange of experience by third parties (for example, start-up initiatives or company / tax consultants) in order to structure or reorient self-employment. There are no legal claims for these services.

Fragen und Antworten zu Hartz IV und Selbständigkeit

Questions and answers about Hartz IV and independence

 

The admission of entrance fees is no longer possible after the foundation. If you are entitled to benefits, you can apply for the purchase of necessary goods as self-employed loans / grants. In addition, the Jobcenter can also provide advice and impart knowledge in accordance with § 16c Paragraph 2 SGB II. Irrespective of this, there is the possibility of applying for an increase in Arbeitslosengeld II if your income from self-employment does not cover your livelihood.

The entrance fee is paid in addition to the Arbeitslosengeld II and is not billed with the Arbeitslosengeldt II. However, your income from self-employment is calculated in the calculation of the Arbeitslosengeld II, with no allowance of EUR 100 being taken into account. For income exceeding this amount, a graduated exemption is granted which is based on the amount of the income earned.

Further Information about the Hartz IV Free Allowance

With regard to pension insurance, you should inquire as to whether you belong to the professional groups subject to statutory compulsory insurance. If this is not the case, you have the option to insure yourself on your own initiative or to voluntarily insure yourself. In the statutory health insurance, self-employed persons are not subject to compulsory insurance without exception. However, self-employed persons can continue an existing statutory health insurance as a voluntary member.

For recipients of Arbeitslosengeld II, it is not possible in principle to insure themselves voluntarily in unemployment insurance.

Yes. Self-employed persons can receive a subsidy to the health insurance contribution if they can not provide it, apart from the daily costs of life support, by self-employment.

In principle, the entrance fee does not count as a taxable income.

Whether the employment of a minor employment is possible alongside a self-employed job with the entry fee, the jobcenter checks the individual cases. If the income from your self-employed activity is so small that you receive an increase in Arbeitslosengeld II, you are obliged to report any change in income to your jobcenter, since in principle any income is taken into account in the calculation of Arbeitslosengeld II.

2017-02-03T09:35:29+00:00