Health insurance and unemployment benefits due to low self employed income

8 posts in this topic

Been in DE for a few years now. My UK Ltd company pays me a salary, on which I pay personal tax in Germany. Due to COVID, I lost my main contract and my UK company has had a pretty bad year and there's not enough profit to pay me much  salary. So I'll probably forgo salary this year and maybe next year as well. I still work fulltime on the business and am hopeful of turning things around, so I am not wanting to just give it up and get a regular job. I'm ok with living frugally for a year or two and not drawing much income.  

 

I have a few hypothetical questions. Not all apply to me but I'm interested to know the answers.

 

1. Re health insurance. TK.  As far as I understand, the minimum earnings limit these days is 1038 EUR monthly, so I'll have to pay approx 190 EUR per month at minimum, even if I'm drawing a salary that is lower than this.  Right? 

 

2. What happens if one cannot afford to pay this 190 EUR per month for health insurance? Do they put you on a payment plan and you have to pay it back later when you have more income? 

 

3. If I am working in my own company but not generating enough profit to pay a salary, where does this leave me in terms of claiming unemployment or some other type of social security benefit in Germany?   My wife seems to think that the German government would not be ok with me remaining self employed but still being reliant on the state for money. She says the German government won't pay benefits to someone who chooses to be self employed rather than just looking for a regular job. Is she correct? 

 

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2 hours ago, CustomX said:

Been in DE for a few years now. My UK Ltd company pays me a salary, on which I pay personal tax in Germany.

 

Has your company been paying social security contributions in Germany on your behalf?

 

2 hours ago, CustomX said:

3. If I am working in my own company but not generating enough profit to pay a salary, where does this leave me in terms of claiming unemployment or some other type of social security benefit in Germany?

 

If you have not been paying unemployment insurance contributions in Germany, you are not eligible for unemployment insurance benefits (ALG I) in Germany.

 

Whether or not you are eligible for welfare (ALG II) benefits depends on many factors.

 

 

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Everybody in Germany must have a valid health insurance there are no exceptions.

 

Financial Aid from the goverment for self-employed people has been in place since April. Google Corona Hilfe and see links below.

Unterstützung für Selbstständige und Unternehmen im November

https://www.bundesregierung.de/breg-de/themen/coronavirus/info-unternehmen-selbstaendige-1735010

 

 https://www.toytowngermany.com/forum/topic/389106-financial-aid-for-self-employed-people/

 

The Verband der Gründer und Selbständigen Deutschland e.V. has a wealth of information on their homepage and there are regional groups in most areas.https://www.vgsd.de/

  

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1 hour ago, White Rose of Yorkshire said:

Everybody in Germany must have a valid health insurance there are no exceptions.

 

Financial Aid from the goverment for self-employed people has been in place since April. Google Corona Hilfe and see links below.

 

The OP is an employee of his company that is based in the UK. I'm not sure whether or not he counts as self-employed in Germany. In this case the devil is in the details and without knowing all the details any answer we give is all just speculation.

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On 11/17/2020, 6:05:45, engelchen said:

 

Has your company been paying social security contributions in Germany on your behalf?

 

 

I don't think my company has, but I think I may have done personally. Its done by our steurberater when he works it all out. 

 

 

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On 11/17/2020, 7:29:26, engelchen said:

 

The OP is an employee of his company that is based in the UK. I'm not sure whether or not he counts as self-employed in Germany. In this case the devil is in the details and without knowing all the details any answer we give is all just speculation.

 

I think I fall between the cracks actually. I don't think owner/operator one man companies are eligible for covid financial handouts in the UK, and I think that due to not being employed by a German company, I'm likely not eligible to claim any aid here in DE. 

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On 17.11.2020, 18:19:19, White Rose of Yorkshire said:

Everybody in Germany must have a valid health insurance there are no exceptions.

 

Financial Aid from the goverment for self-employed people has been in place since April. Google Corona Hilfe and see links below.

Unterstützung für Selbstständige und Unternehmen im November

https://www.bundesregierung.de/breg-de/themen/coronavirus/info-unternehmen-selbstaendige-1735010

 

 https://www.toytowngermany.com/forum/topic/389106-financial-aid-for-self-employed-people/

 

The Verband der Gründer und Selbständigen Deutschland e.V. has a wealth of information on their homepage and there are regional groups in most areas.https://www.vgsd.de/

  

 

Is there a place in the Online Elster USt-VA form to enter the received amount of November Coronahilfe?

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CustomX,

 

Many UK freelancers work in the UK on a LTD company basis. They often have no choice in the matter as you'd never get a role as 'self employed' as happens commonly in Germany. The problem with just keeping a UK company, is that the German tax office will see it as managed from Germany and therefore the company is taxable in Germany. For a longer term stay in Germany, being a freelancer is a much better option in many regards, but wose in others such as liability etc. Getting married also helps a lot in Germany compared with the UK in terms of tax liability.

 

Anyway, concerning your UK company arrangement. You are (I guess) paying PAYE in the UK. This include NI which covers UK unemployment.

Also working on a low salary in the UK often qualifies for state support as the wage is too low.

Also it can help with housing benefit, working tax credits etc. A low salary is that threshold where you and the employer pay NI, £9516 in 2021.

Was a long time ago I lived in the UK as a freelancer, but you were always advised to have a salary of at least the level where you contributed to the social taxes.

 

Here might be a good place to look

https://www.citizensadvice.org.uk/benefits/help-if-on-a-low-income/

Note sure how residence affects these, especially post brexit.

 

If you are working in Germany on a low income, get yourself a German salaried job. It covers unemployment insurance, pension payments etc. You get some percentage of your net salary, unlike the UK which pays out a fixed amount. Avoid mini jobs as they seem (IMHO) to be useless in terms of social benefits. Even a part time job which pays 500 Euros a month net salary, costs the employer and you around 750 Euros in total. Thus around a third is being paid in social and income taxes, even though the income tax at that point is zero.

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