Unemployment > Placement Coupon

Placement Coupon by the Labour Agency

Definition, Explanation

By the granting of a placement coupon (Vermittlungsgutschein, VGS) an unemployed person is enabled to get support in finding a job from private placement agents. If the private placement agent successfully places the unemployed into a new job, then the placement coupon money will be paid, for the first half being 1,000 Euros as soon as the employment has been going for 6 weeks, while the second half being another 1,000 Euros follows after the employment having run for 6 months.

The method of placement coupons is today legally enacted until 31.12.2010. Legal entitlement is defined in SGB III § 421g.

Who is entitled to a placement coupon:

• Unemployed receiving unemployment benefit I and
• Not having found any new job after 2 months of being unemployed (waiting period)
• Unemployed working in a 1-Euro-Job
• Entitlement is not legally granted to unemployed who are receiving unemployment benefit II (Hartz IV). However, in these cases, the responsible labour agency office can facilitate placement coupons by positive estimation: if funds available are sufficient, respective getters of unemployment benefit II will be granted a placement coupon as well, after an evaluation procedure

If those prerequisites are fulfilled, the application for a placement coupon will be valid, with at least 3 months of unemployment having passed in advance. This is also for people going through aptitude tests or further education who meet the mentioned criteria.

Payment of placement coupon money:

• 1st half, being 1,000 Euros, when the employment has been running for 6 weeks
• 2nd half, being 1,000 Euros, when the employment has been running for 6 months
• The placement coupon amount of 2,000 Euros includes turnover tax
• The placement coupon for long-term-unemployed and disabled can be worth up to 500 Euros more
• The occupation of placement must be an employment liable to social insurance of minimum 15 hours per week. The occupation is liable to social insurance only if it is exerted within Germany
• The contracted duration of the employment must be at least 3 months

No payment of the placement coupon money:

• Within the last 4 years before the placed employee’s reported unemployment, the new employer has already been employing him for longer than 3 months, in an employment liable to social insurance contributions. Exception: placement by an institution caring for working life participation of severely disabled
• The placement agent has not registered his trade as a job placement agency. Exception: Placement by an institution caring for working life participation of severely disabled
• Employer and placement agent are economically and personally affiliated

Procedure:

• Jobseeker and placement agent make a written contract that provides the placement agent to search for a suitable job
• In case of success, the placement agent will be entitled to a commission payment which is covered by the placement coupon
• The payment to the placement agent is done in two halves of each 1,000 Euros, the first half being paid when the employment has been running for 6 weeks
• Until a period of 6 months has passed, the commission payment is deferred. After the employment has been lasting for 6 months, the second half, 1,000 Euros, is due
• If you do not have a placement coupon, you have to pay any private placement agents you employ on your own

Tips, Checklist

• Apply for the placement coupon as soon as, for full 2 months, you have both been unemployed and been receiving unemployment benefit I
• Picking a private placement agent, be sure to have one that advises you patiently
• Be suspicious of agents who demand a placement coupon right away
• Get information from other unemployed and from the web in how far the placement agent you have picked is working seriously
• It might even happen that in the job advertisement, already, the placement coupon is demanded. If you are not fulfilling the requirements for being granted a placement coupon, then you are not welcome as an applicant to those employers. That is, you do not need to try applying at all; here, placement agents are primarily interested in the placement coupon money. Be careful with such job adverts! Normally, the employer pays for the job advert and for the expenses for open position recruitment

Last update: 01/01/2010