Anyone who is unemployed and would like to become self-employed can have their project subsidized by the state. While ALG 1 recipients can apply for the start-up subsidy, ALG 2 recipients can apply for the entry fee. the Answers to the most important questions We have compiled the following article on funding with the entry fee.
1. How high is the funding with the entry fee?
Entrepreneurs can use the entry fee for a total period of 24 months in addition to the monthly standard benefit receive. With the subsidy, ALG 2 recipients usually receive 50% of the ALG 2 standard benefit as a subsidy. The entry fee for starting a business is determined according to the following assessment bases:
Lump sum assessment: Here founders receive up to 75% of the ALG 2 standard rate as funding. The flat-rate is intended for “people who need special support” who are unemployed due to their ongoing need for help and have been receiving ALG 2 for a long time.
Case-by-case assessment: The monthly subsidy is a maximum of 50% of the ALG-2 subsidy rate. In addition, the basic amount can be increased by a further 20% in the event of longer periods of unemployment. In addition, a supplementary contribution of 10% can be granted for each additional beneficiary of a benefit community
Funding with the entry fee is in two phases divided up:
- Basic funding for six months
- Further funding if required
In addition to the entry fee, ALG-2 recipients who want to become self-employed can further promotion apply for. In addition to the entry fee, the state supports those who want to set up a business with an investment subsidy. This funding of up to 5,000 euros is intended for the procurement of material goods such as office equipment, machines and materials for setting up a company.
2. What requirements must be met to apply for an entry fee?
If you want to have your business idea promoted with the entry fee, you have to certain conditions fulfill. For example, for the application, proof of employment subject to social security contributions or full-time self-employment with a weekly working time of at least 15 hours must be proven.
In order to ensure the long-term success of the business idea, the sustainability of the project must be proven by an expert opinion (certificate of viability) when applying for the entry fee.
service tip: The Expert Network Germany offers start-ups to create such a viability certificate within 48 hours (contact).
In addition, personal and professional suitability for self-employment plays an important role. Therefore, founders should prepare well for the entry fee application in order to increase the chances of receiving the funding. The best way to do this is through business start-up advice.
Even if all requirements are met, this does not mean that founders will definitely receive the entry fee. Because since 2012 the entry fee has been considered a discretionary benefit of the job center and there is no legal claim more on the promotion.
The clerks first check whether founders can be placed in an employment relationship before the entry fee is granted. So that the clerk can be convinced of the business idea, founders should well prepared be. In particular, a professional business plan including a financial plan must be drawn up for this purpose.
(reading tip: Create a business plan for the entry fee application)
3. What points should be considered when creating a business plan for applying for an entry fee?
In a business plan or business plan, founders explain their intentions and present the business idea convincingly. In addition, founders go into possible risks and opportunities in the context of founding a company in this document. Since the entry fee is a discretionary benefit of the job center, founders should work particularly carefully when creating a business plan. A business plan should The following points contain:
Only if the clerk is convinced that founding a company can prevent unemployment in the long term does the chances of the applicant approving the entry fee increase.
Tip: free start-up advice from AVGS for the unemployed
4. Do I have to pay back the entry fee?
No, the entry fee is a state benefit from the job center that does not have to be repaid. The promotion should incentive and financial aid for integration into the general labor market.
However, founders should note that the entry fee can be reclaimed from the job center if the subsidy and social security are already secured by a full-time job and the job center finds out about this.
5. Can I earn money on top of the entry fee?
If you want to become self-employed, you have to reckon with the fact that it may take several months for the company to be successful. It may therefore be necessary to take up part-time work. When you receive an entry fee, all monthly income of more than 100 euros is offset against the support provided for ALG 2 and the entry fee.
6. Entry fee and compulsory social security: What do I have to consider here?
As a recipient of entry-level money, business founders are generally eligible for ALG 2 socially insured via the job center and therefore do not have to pay their own health, nursing care and pension insurance contributions.
If the entitlement to ALG 2 no longer applies, since business founders can earn their own living through self-employment, the insurance can usually be continued as a voluntary member of the statutory health insurance system. The economic performance then counts for the assessment of the contribution. As an alternative to voluntary insurance, entrepreneurs also have the option of taking out a private insurance to complete.
7. Do I have to pay tax on the entry fee?
Since the entry fee is a grant, it is not recorded as income and Not tax credited.
8. Can the entry fee be refused?
Whether business founders receive the support with the entry fee is at the discretion of the responsible clerk at the job center. Therefore, it can also happen that the entry fee application is rejected. If this is the case, it makes sense to keep calm and object as soon as possible. Business founders have four weeks to do this.
If this measure is unsuccessful, business founders can sue before the social court. But sometimes one is worth it Critical look in the business plan. Because this is often incomplete and/or incorrect and led to rejection.