Working Start > Business Startup > Starting Subvention

Starting Subvention - Governmental Support for New a Company

Definition, Explanation

Tips, Checklist

Definition, Explanation

Since August 1, 2006, a Gründungszuschuss (Starting subvention) is given, which has, after July 31 2006, fully replaced the Ich-AG and the bridging money. All of these are governmental means of support for alleviating business start-ups out of unemployment. Getters of unemployment benefit II are not supported in this way; instead they can apply for a "commencement benefit".

For the starting subvention to be approved, it is required that the provided-for independent business occupation is exerted as a regular/non-sideline one and is of a workload of at least 15 h a week. Also, the remaining, to-go entitlement to unemployment benefit must be at least 90 days. A business start ends the unemployment. Not supported is a new-foundation in immediate consequence of the reason-less dismissal of the previous employedness. The earliest point of time a new-foundation is supported after such a dismissal is 3 months later.

The maximal duration of support is 15 months. For the first 9 months after the start of business, founders get, additionally to their original unemployment benefit, a monthly sum of 300 € for personal security, that is for health- and nursing-care-insurance and for pension contributions. After the 9 months, the whole support is reduced to the 300 € only, while unemployment benefit is dropped. Required is certifying business activity and regular-occupational activiy.

If you are still entitled to unemployment benefit, this is not postponed or maintained by the subvention - it is in fact cancelled in consequence. Away to gain new entitlement is the voluntary effecting of a further-insurance in the unemployment insurance.

Starting subvention is taxless.Subventions that are already being paid, like Ich-AG pr bridging money, are not affected by the new regulation.

Tips, Checklist

• As an applicant, you want to convince your responsible job center of your personal and professional capacity of starting a business. Prepare well for the interview. In case your capacity is doubted, you may be demanded to undergo an evaluation process or participate in a start-up-course
• There is no obligation to effect a statutory pension insurance, but it is highly advisable to partly use the 300 € for this
• Effect a health insurance. For the time you get the subvention, it is assumed you have a monthly income of 1.242,50 € (data of 2008). Added to the income is the subvention sum exclusive the 300 €. A rate of contribution of 14,2 per cent, for example, results in contributions of 174 € a month. the monthly minimum contribution in nursing care insurance is 20,83 resp. 23,89 € for insurants without children. Contributions increase in proporition when your income does
• The application for voluntary further-insurance in unemployment insurance has to be made at the latest within 1 month after starting the independent business. Monthly contributions amount to slightly below 40 € in West, and around 34 € in East Germany

Last update: 12/27/2009