Self-employed and decided to resign my contract

25 posts in this topic

Posted

Hi,

I just decided to quit my rather depressing job. There's a good chance that once my previous employer finds out, they'll want to snap me up, but in case that doesn't happen, I'm wondering what the situation is with unemployment benefits and payment of health insurance.

I'm a Brit selbständig Software Engineer here (since 2007) and I've been paying for private health insurance and been employed and paying German taxes that whole time. Prior to that I was health-insured and paying taxes in America. I've got savings in the bank and no mortgage.

I don't know whether I'm entitled to anything here. I'd be dumb to not claim it if I am, after paying all that tax into the system. So, can I get my private health insurance paid? Or do I have to drop it and switch to the state one? Am I entitled to any kind of unemployment benefit? After a certain period of time does that kick in (because I voluntarily quit) ?

I don't plan (or want) to remain out of work and screw the system, but don't want to be an idiot that's not claiming something from a system I've paid into.

If I'm not entitled to anything (a) as an ausländer, or (2) because I voluntarily quit, that's fine, I deserve it.

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Posted

Are you selbständig (= self-employed) or are you an employee?

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Posted

:) Hi Derek! I´m assuming you´re an employee. If you quit your job, I believe you are not entitled to unemployent benefits for three months ( though you should inform the Arbeitsamt anyway ).

As far as health insurance is concerned - you have to stay health insured and pay for it yourself ( until any future unemployent benefits would kick in - then you can get help with the payments if need be ).

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Posted

If you are selbständig, i.e. self-employed, then you aren't entitled to anything.

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Posted

Hi Derek! KEYDECK is an esteemed and kind gentleman poster on Toytown who would have gently pointed out the Search function on this page to you!

Anyway, I´m assuming you´re an employee. If you quit your job, I believe you are not entitled to unemployent benefits for three months ( though you should inform the Arbeitsamt anyway ).

As far as health insurance is concerned - you have to stay health insured and pay for it yourself ( until any future unemployent benefits would kick in - then you can get help with the payments if need be ).

I'd seen that three months thing in the threads I read (didn't need Keydeck to point me to them :)) but it wasn't clear if it applied to selbständige too. According to PandaMunich's reply, it doesn't, 'cause I ain't getting jack.

If you are selbständig, i.e. self-employed, then you aren't entitled to anything.

Fair enough. I didn't have a feeling of entitlement or anything, just wondered if I somehow might be ignoring a possibility if I didn't look into it :)

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Posted

Just a quick tip: For questions like this, it helps to be as precise as possible. Your posting says:

I just decided to quit my rather depressing job. There's a good chance that once my previous employer finds out...

... and the reader thinks: Ah, he was employed. And the job before that, he was employed as well. Then you write:

I'm a Brit selbständig Software Engineer

... and the reader thinks: Oh - so he wasn't employed after all, he's self-employed.

and I've been paying for private health insurance and been employed and paying German taxes that whole time

... wait, he was employed after all?

I'm hoping you see what I mean - as the difference between employed and self-employed is extremely important and makes all the difference as to what options are open to you. As PandaMunich already explained, self-employed means you are not entitled to any unemployment benefits.

Best of luck finding something new!

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Posted

~~the reader thinks: Oh - so he wasn't employed after all, he's self-employed~~

I see what you mean. I guess I wasn't at all clear.

Best of luck finding something new!

Funnily enough, the whole thing is over and done with now. My previous "contract giver" (rather than "employer") has offered me a contract in the last hour. So now I'm back to where I was [happy] before I made this unhappy switch at the start of this year. :D

I was actually looking forward to a few months off.

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Posted

Hi, quick turn around. Well done.

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Posted

What happens now?

The astute and very fortunate Derek edits his thread title... :rolleyes:

in order to save Monday morning's mass movement of TTers from encountering that feeling of frustration :(

when faced with the sudden loss of a perceived opportunity to offer him their help, advice, criticism...

or even to argue about the benefits of enjoying pre-tax-paid subsidised R&R v the advantages of continual savings growth. :D

2B

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Posted

What happens now?

The astute and very fortunate Derek edits his thread title...

:) Updated the thread title.

Short version of the story:

From 2007 to the end of 2011 I was (very happily) working selbständig for an American company, but late 2011 things started looking dodgy for their future.

At the start of 2012 I moved to a company on this side of the Atlantic which was booming. It didn't take long before I realised it was a mistake.

At various points throughout the year I tried to get back with the American company. My old boss wanted me back but couldn't get budget approval, in fact he was letting people go rather than hiring.

Cue yesterday, I decided I couldn't take it anymore and quit, and started this thread.

A couple of hours later my old boss from the American company confirms he can have me back now.

Now I wish I'd waited a few days and I'd never have needed to start it. D'oh!!

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Posted

Ok, that's good (not so good you didnt get any time off though) but what about your status...

ie are you really self employed or are you employed?

And what would you rather it be?

Reason I stress this is that you need to consider the consequences for later on if you have a stretch without work. Also regarding health insurance, pension insurance, tax etc. I've been both at different times and there are pros and cons involved.

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Posted

Ok, that's good (not so good you didnt get any time off though) but what about your status...

ie are you really self employed or are you employed?

And what would you rather it be?

Definitely self employed, and definitely self employed :) I mistakenly (above) referred to the company I was contracting for as my employer.

Reason I stress this is that you need to consider the consequences for later on if you have a stretch without work. Also regarding health insurance, pension insurance, tax etc. I've been both at different times and there are pros and cons involved.

Yeah, I'm all over that. I've got a private UK pension, and have contributed to British, American, and German tax coffers, so I believe I'm entitled to some partial pension in one or more of those countries too (but not relying on that). I'm not concerned about being out of work as far as living expenses goes, I've got enough saved up to see me to pension time. It's the health insurance payments that would bug me. I've got a return to the UK in the back of my mind always too.

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Posted

If you are selbständig, i.e. self-employed, then you aren't entitled to anything.

Resurrecting this thread as some things are about to happen. I gather from Panda's response that while still being selbständig, I'm not paying into the state pension scheme and the unemployment benefits scheme.

I think (but it's not completely clear yet) that I may be transferring from being selbständig to being "employed" (not selbständig) in a German company. Will I automatically have to start contributing to the pension and unemployment schemes, or can I choose not to do that. I doubt I'll be in Germany by pension age and don't mind not getting any unemployment benefit if it means I didn't have to contribute to it. It's my expectation that I'll have no choice on either of these issues, but I'm just wondering/hoping. Also, will I be able to transfer over my private health insurance scheme (which is probably a special one for selbständiger) to my permanent job? The salary will be over the threshold to allow me to have "a private health plan" but I'd quite like to keep the current one.

There's a chance (again) that this might not all happen, but it'd be nice to know these things in advance before I discuss things with the company.

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Posted

If you're regularly employed, you have to pay into the pension and unemployment schemes.

If your salary is more than €52,200/year (€4,350/month), you can stay with your private health insurance.

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Posted

Thanks. It's what I thought, but it's nice having someone agree :)

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Posted

You say, Derek, your private health insurance is probably a special one for Selbstständige. Is it an international one? if so, you cannot keep it but would have to take out a German one.

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Posted

It's definitely a German one. I started it as soon as I became Selbständig here. I just had the thought that maybe it's somehow "special" for Selbständiger. Maybe such a thing doesn't exist and I'm looking for problems where there are none.

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Posted

Remember that any state pension benefits accrued in the German system can be transferred to another EU country that you move or retire to and of course after 12 months of employment if you become unemployed you usually can claim additional benefits while looking for new work

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Posted

Thanks YL, I didn't know that.

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Posted

If you think that this REAL employment will last for a while, make sure you discuss early one with the employer/HR your options also regarding bAV (betriebliche Altersvorsorge = company pension schemes). As an employee you are entitled to do one, with our wihtout copayment from the employer (though smart employers will always offer copayment as part of fringe benefits to make/keep employees happy). And bAV is among the tax subsidizied pension plans available in Germany by far the most attractive for employees.

Cheerio

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Posted

Thanks, but pension contributions are the last thing I want to do. My biggest financial regret ever was contributing £25K into a personal pension when I was in my 20s (20 years ago). The fund (which is frozen) is now worth over £50k (the bad performance mostly due to the 2000 and 2008 crashes), but I don't get any of it for another 20 years. I'd much rather have that money available now. There's no way in hell I'm putting any more money into restrictive pensions. Savings accounts all the way for me. If my family history is anything to go by, I might not live long enough to see a penny of that pension fund. It will contribute zero to my hope of retiring at 50, and if I do succeed in retiring by 50 (in a couple of years time) I don't know how that's going to affect the final year's salary thing. If I could release that fund for only 50% of it's value I'd do it. I know those schemes that offer to release pension funds are a scam, no worries on me being taken in by them. I'm just resigned to the fact that I'll probably never see any of that money.

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Posted

the earliest you can get to the money in a bAV-plan is indeed now set at age 63...so, if you can and will retire at 50 years of age, you would not be able to cash into that kinda money for another 13 years. If that is the main yard-stick for you, then it woul dnot make sense for you, I agree.

But even though you hint to your family history, there is still the "risk" of longevity and from that side it makes sense to set up pension plans where you have the option/right to use your accrued capital with an annuity based on an already guaranteed/fixed pension factor. Plus, as a savings plan the tax savings and (if your gross income is lower than 66.000 EUR p.a.) also the savings from social welfare contributions funneled into your own pension capital can make for a nice yield p.a. that is hard to beat with normal saving and investment plans. Just saying ... :rolleyes:

Cheerio

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Posted

I don't expect I'll be earning less than 66k in the near future, maybe if I get bored in my mid 50s and decide (or need) to take a job then that's a possibility. I don't think I can be convinced about pensions now though. Yes there's a "risk" ;) of longevity. I am planning for that, it's just using savings rather than pensions. Yes it's tax inefficient but for me the flexibility wins every argument. I do still have that pension, which is currently estimated to give me a few grand a year, which will be a nice bonus if longevity wins out :)

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