Unemployment insurance is mandatory for all employees in Germany. As of 2013 contributions are 3.0% of gross monthly salary up to €5,600. This is split equally between employer and employee.
Unemployment benefits are paid if you are unemployed and have worked (and paid contributions) for at least 12 months in the last two years. To receive unemployment benefits, you must register at your local employment office (Arbeitsamt). You should register as soon as you become unemployed, as you will only be paid from the registration date and delays can lead to further penalties.
Benefits are around 60% of your previous net salary and are paid directly into your bank account. If you have children, this percentage rises to around 67%. The length of time you will receive benefits depends on the length of former employment and your age. Benefits are restricted to one year for people up to 45 years.
While receiving benefits, you must to report regularly to your Arbeitsamt. You are also responsible for proving you are looking for work if requested.
Please note that unemployment insurance is undergoing rapid changes as the government tries to keep costs under control. Rules and regulations are changing quickly and not usually in favour of the unemployed!
The Bundesanstalt für Arbeit (German Federal Employment Office) has a number of employment promotion schemes for employers and employees alike and endeavours to place as many job-seekers as possible in employment. Further information can be found at www.arbeitsamt.de, www.bmgs.bund.de and www.bmwa.bund.de.