Key Points at a Glance
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A termination agreement can lead to the Employment Agency imposing a blocking period of up to 12 weeks. This means that your claim for Unemployment Benefit I is initially suspended, and the total duration of benefits is reduced accordingly.
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A blocking period can often be avoided or shortened if there is a so-called “important reason” for the termination agreement, such as an imminent dismissal by the employer, health reasons, or other serious circumstances.
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The wording of the termination agreement is crucial: the notice period, severance pay, and termination date should be chosen sensibly to credibly demonstrate to the Agency that a dismissal was inevitable anyway.
1. Why is there a risk of a blocking period for unemployment benefits?
When you sign a termination agreement with your employer, the employment relationship usually ends voluntarily. You have therefore actively contributed to the termination. The Employment Agency often assumes that you have “co-caused” your unemployment. This can be viewed as conduct contrary to insurance principles.
As a result, a blocking period is often imposed: during this time, you receive no unemployment benefits, even though a formal claim exists.
2. How long does the blocking period last?
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By default, the blocking period is 12 weeks starting from the last working day or the date of release from work.
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The total possible entitlement to unemployment benefits is reduced accordingly; for example, a 12-month entitlement effectively becomes only 9 months of payments.
However, there are exceptions and special regulations.
3. When can the blocking period be bypassed or shortened?
A blocking period does not necessarily have to occur. Possible exceptions or reductions include:
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There is an important reason for the termination agreement, such as an imminent operational dismissal, illness, bullying, or other serious reasons.
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The termination date agreed upon in the contract corresponds at least to the statutory notice period, meaning the termination agreement only takes effect because a regular dismissal could have followed anyway.
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The severance pay is moderate or proportionate and is not “excessively high.” A conspicuously high severance payment could be viewed with suspicion by the Agency.
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In individual cases, special hardship may also exist, e.g., if the full blocking period would cause financial distress. In such cases, the blocking period may be shortened under certain circumstances.
4. What you should pay particular attention to in a termination agreement
If you are reviewing a termination agreement and want to avoid a blocking period being imposed, you should pay particular attention to the following points:
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The contract should clearly document that the background was an unavoidable dismissal, i.e., that a regular dismissal would have been likely anyway.
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The termination date agreed in the contract should correspond at least to the statutory notice period.
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The severance pay should not be excessively high. A very high severance payment can arouse suspicion at the Agency.
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When in doubt: Consider a regular dismissal or a court settlement (e.g., after an action for protection against unfair dismissal). These options are generally considered lower risk regarding blocking periods.
5. Conclusion
A termination agreement can entail significant disadvantages regarding unemployment benefits, particularly a blocking period of up to 12 weeks and a reduced benefit duration. However, these disadvantages can be avoided in many cases if the contract and the framework conditions are carefully designed. Important factors include: realistic notice periods, comprehensible reasons, and a moderate severance payment. If there is any uncertainty, an individual review, for example through legal counsel, is highly recommended.
6. FAQ
Yes, the entitlement generally remains in place. However, a blocking period may initially be imposed during which you receive nothing.
Usually 12 weeks. It can be shortened if special circumstances exist.
Yes, for example, if the termination agreement is concluded due to an imminent dismissal, illness, or other important reasons, and if the notice period and severance pay are appropriate.
A very high severance payment can be viewed critically. The Agency could become suspicious and impose a blocking period because it considers a regular dismissal to have been avoidable. Therefore, an appropriate arrangement is important.