AmtsDeutschland
0%
Skip to main content
Authorities Most popular Guides
FAQ Contact
Find an official procedure

Apply for Insolvenzgeld (insolvency benefit)

Employment agency · Pay when your employer becomes insolvent

OnlineBy postIn person

Insolvenzgeld (insolvency benefit) covers the pay your employer can no longer pay you because of insolvency. Under § 165 SGB III it covers claims for the preceding three months of the employment relationship before the insolvency event.

An insolvency event is the opening of insolvency proceedings, the dismissal of the application for lack of assets, or the complete cessation of business operations where proceedings are clearly ruled out for lack of assets. What is paid is the net pay, capped at the contribution assessment ceiling.

The decisive factor here is not a figure but a deadline: under § 324 Abs. 3 SGB III, insolvency benefit must be applied for within a cut-off period of two months after the insolvency event. Anyone who misses it loses the entitlement – unless the failure was through no fault of their own; in that case the two-month period only begins once the obstacle no longer applies.

Last updated27 August 2026
Legal basis§ 165 SGB III · § 167 · § 324 Abs. 3
VerificationChecked against gesetze-im-internet.de
Written and reviewed byAndrés Sánchez Botta
Independent information site: we are not the Agentur für Arbeit (employment agency), not a public authority and not a paid advice service — we do not submit applications on your behalf. All information comes from official sources and is explained simply here; the competent authority's decision is always binding. The two-month period is a cut-off period. All information is provided without guarantee. We are neither solicitors nor tax consultants: we document administrative procedures and check the information against the official source — this is information, not legal or tax advice.
Scope3 months' net payBefore the insolvency event
Cut-off period2 monthsFrom the insolvency event
Upper limitContribution assessment ceiling€8,450/month (2026)
ApplicationBy you personallyNot by the company
Required documents

What you need

Insolvency benefit certificate

This is issued by the insolvency administrator; it sets out the outstanding pay claims for the last three months. Do not wait for it to submit the application: the certificate can be submitted later, as the two-month period runs independently of it.

Employment contract and payslips

To prove the amount of the claim. Enclose the payslips from the months before the insolvency event, as well as the employment contract with the agreed pay – especially if payslips are missing because the company no longer produces them.

Identity card and social security number

For identification and for paying the social security contributions. These are covered by the employment agency, so your insurance cover during the three months is not interrupted.

Bank details

For payment. It is made in a single sum once the claim has been checked. Allow a few weeks of processing time – in larger insolvencies with many people affected, it can take longer.

Proof of the date of termination

If you have already been given notice or have given notice yourself. The three-month period is calculated from the insolvency event, not from the end of your employment relationship – the two often do not coincide.

Step by step

How to proceed

  1. 1

    Establish the insolvency event and its date

    Determine exactly when the insolvency event occurred: the opening of proceedings, dismissal for lack of assets, or the complete cessation of business operations with no prospect of proceedings. The two-month period runs from that day – not from the day you find out about it.

  2. 2

    Submit the application immediately, even if incomplete

    Submit the application to the Agentur für Arbeit without waiting for the insolvency benefit certificate. It can be submitted later; however, the cut-off period runs independently of it. The application can be made online via eServices, in writing, or in person.

  3. 3

    Submit documents later

    Submit the insolvency benefit certificate from the administrator, employment contract and payslips once you have them. If payslips are missing because the company no longer produces them, the employment contract and your own records are sufficient for now.

  4. 4

    Check pre-financing if it takes a long time

    With larger insolvencies, an insolvency benefit pre-financing arrangement is often organised through a bank so that wages flow sooner. For this you assign your claims; the employment agency must approve the pre-financing. Have the terms explained to you before you sign.

  5. 5

    Make sure your insurance cover continues

    The employment agency covers the social security contributions for the insolvency benefit period, so health, pension and long-term care insurance continue. Nevertheless, check with your health insurance fund (Krankenkasse) that the notifications have arrived – with company closures, notifications are more often missed.

  6. 6

    Clarify what comes next

    Insolvency benefit only covers the preceding three months, not the period afterwards. At the same time, register as seeking work and – once the employment relationship ends – as unemployed, so that unemployment benefit follows without a gap.

Fee information

Costs and payment

The application is free of chargeFunded via the insolvency benefit levy
Application and objection (Widerspruch)Free of charge
ScopeLast 3 months' net pay
Cut-off period2 months from the insolvency event
Upper limitContribution assessment ceiling
Social security contributionsCovered by the employment agency
FinancingInsolvency benefit levy paid by employers

For employees the procedure is free of charge; insolvency benefit is funded through the insolvency benefit levy, which employers alone bear. Economically, two limits matter. In substance, insolvency benefit only covers pay claims for the last three months of the employment relationship before the insolvency event – older arrears are insolvency claims and must be registered in the insolvency schedule, usually with only a low insolvency dividend. As to amount, the pay taken into account is capped at the contribution assessment ceiling, €8,450 a month in 2026. But the most important limit is the time limit: the cut-off period of two months after the insolvency event (§ 324 Abs. 3 SGB III). It runs from the event itself, not from when you find out about it. If the failure was through no fault of your own, the period only begins once the obstacle no longer applies – but you should not rely on that.

Good to know

Important notes

Two months, running from the event. The cut-off period under § 324 Abs. 3 SGB III runs from the insolvency event, not from the day you find out about it. Establish the date immediately and note the deadline.

Do not wait for the certificate. The insolvency administrator often needs weeks for the insolvency benefit certificate. Submit the application beforehand and provide the certificate later – otherwise the period expires while you wait.

Only three months, and only the most recent ones. Older pay arrears are not insolvency benefit claims but insolvency claims. Register these additionally in the insolvency schedule; the dividend is usually low, but it is only zero if you do not register.

The three-month period depends on the event. It is calculated from the insolvency event, not from the end of your employment relationship. Anyone who left earlier may have an entirely different period.

Social security continues. The employment agency covers the contributions for the insolvency benefit period, so no gap arises in your insurance history. Nevertheless, check with your health insurance fund that the notification has arrived.

Pre-financing is possible, but involves assignment. With larger insolvencies, the administrator often organises pre-financing through a bank. For this you assign your claims, and the employment agency must approve it. Read the terms before signing.

Insolvency benefit is tax-free, but subject to the progression clause. Like unemployment benefit, it increases the tax rate on your other income. Expect a possible additional tax bill the following year.

Register as seeking work in parallel. Insolvency benefit only covers the past. For the period after the employment relationship ends, you need unemployment benefit – and for that, timely registration.

Avoid these mistakes

Common mistakes

Missing the two-month period. It is a cut-off period: after it, the entitlement is gone. It runs from the insolvency event, not from when you find out – that is the distinction most people fail on.

Waiting for the insolvency benefit certificate. The most common reason for missed deadlines. Submit the application immediately and provide the certificate later.

Not registering older pay arrears in the schedule. Anything older than the three months before the insolvency event is not covered by insolvency benefit. Without registration in the insolvency schedule, you get nothing at all on it.

Not registering as seeking work. Insolvency benefit does not replace unemployment benefit. Anyone who misses the registration has a gap after the three months, plus a suspension period (Sperrzeit).

Signing a pre-financing agreement unread. It assigns your claims. This is usually sensible, but check the terms and make sure the employment agency has approved it.

Overlooking the progression clause. Insolvency benefit is tax-free but increases the tax rate on other income. The additional tax bill the following year surprises many people.

Frequently asked questions

Questions and answers

What does insolvency benefit cover?

The claims to pay for the preceding three months of the employment relationship before the insolvency event (§ 165 SGB III). What is paid is the net pay, capped at the contribution assessment ceiling of €8,450 a month. Older pay arrears are not insolvency benefit claims but insolvency claims, which must be registered in the schedule.

How long do I have to submit the application?

Two months from the insolvency event – and this is a cut-off period under § 324 Abs. 3 SGB III, not a mere procedural deadline. What matters is the day of the event, not the day you find out about it. If the failure was through no fault of your own, the two-month period only begins once the obstacle no longer applies; however, you should not rely on this.

What counts as an insolvency event?

The opening of insolvency proceedings over the employer's assets, the dismissal of the opening application for lack of assets, or the complete cessation of business operations where insolvency proceedings are clearly ruled out for lack of assets. Establish the exact date, since the period runs from it.

Do I have to wait for the insolvency administrator's certificate?

No, and you should not. The administrator often needs several weeks for the insolvency benefit certificate, while the two-month period continues to run independently. Submit the application immediately and provide the certificate later – this is the most common reason for missed deadlines.

Does my insurance cover continue?

Yes. The Agentur für Arbeit covers the contributions to health, pension and long-term care insurance for the insolvency benefit period, so no gap arises in your insurance history. Nevertheless, check with your health insurance fund that the relevant notifications have arrived – with company closures, notifications are more often missed than usual.

What is insolvency benefit pre-financing?

With larger insolvencies, the administrator often organises pre-financing through a bank so that wages flow sooner than the employment agency can pay. For this you assign your insolvency benefit claims to the bank, and the employment agency must approve the pre-financing. This is usually sensible – but read the assignment agreement before you sign.

Is insolvency benefit subject to tax?

It is tax-free, but – like unemployment benefit – is subject to the progression clause: it increases the tax rate on your other income for the year. This often creates a tax return obligation and an additional tax bill in the year it is received, which many do not expect.

What happens after the three months?

Insolvency benefit only covers the past. If your employment relationship ends, you need unemployment benefit for the period afterwards. So register as seeking work in parallel – at the latest three months before the end, or within three days of finding out – and as unemployed from the first day without employment, so that no gap arises.

Related official procedures

Unemployment benefit (Arbeitslosengeld I)
For the time afterwards
60–67% of net pay
Register as a jobseeker
Handle in parallel
Free of charge
Kurzarbeitergeld (short-time working allowance)
Often the step before
60–67 %

Cannot find the official procedure you are looking for?

Tell us what information you need.

Send a request