Employers push to cap unemployment benefits at twelve months for all ages

Ahead of the Arbeitgebertag, the Bundesvereinigung der Deutschen Arbeitgeberverbände is calling for a uniform twelve-month ceiling on unemployment benefits, ending the longer entitlements currently granted to workers over 50, 55 and 58 years old. The association argues that the system should only cover temporary job loss, not facilitate early retirement, and that older job-seekers need faster placement. Calculations suggest the reform could reduce expenditures by up to two billion euros each year, easing the Federal Employment Agency’s expected deficit of nearly ten billion euros in 2026.

Chancellor Friedrich Merz will speak on the matter today, and the Bundestag’s Committee on Labor and Social Affairs is reviewing a broader overhaul of the employment agencies. The government’s draft plan does not yet include the proposed cut, and critics such as the Institut für Arbeitsmarkt- und Berufsforschung and the Deutscher Gewerkschaftsbund warn that reduced benefits could increase reliance on basic social assistance.