Benefits & social support

Understanding pension, parental allowance, sickness benefit and unemployment benefit

This guide explains when pension, parental allowance, sickness benefit and unemployment benefit calculators are useful.

Updated on Apr 21, 2026 Topic: Housing benefit, parental allowance, unemployment benefit and more

Four benefits, four life situations

The German social insurance system covers four key situations in which regular work income disappears or pauses:

Benefit Trigger Provider
Statutory pension Reduced earning capacity or retirement German pension insurance
Parental allowance Birth and care of a child State Elterngeld office
Sickness benefit Longer illness Statutory health insurer
Unemployment benefit I Loss of a covered job Federal Employment Agency

Each of these benefits has its own eligibility rules, its own formulas and its own caps. Anyone comparing them in a life phase should know what each is meant for.

Statutory pension: Entgeltpunkte and pension value

The statutory pension follows a clear formula:

  • Monthly pension = personal Entgeltpunkte × access factor × pension-type factor × current pension value

The components:

  • Pay points (EP): per calendar year, EP are credited based on the ratio of personal gross earnings to the average earnings of all insured. Earning exactly the average (for 2026 about 47,443 €) corresponds to 1.0 EP. Half the average yields 0.5 EP, double the average 2.0 EP (capped at 2.1 EP per year by the contribution ceiling).
  • Access factor: 1.0 for retirement on time; 0.003 deduction per month for early retirement (3.6 % per year); 0.005 bonus per month for late retirement (6 % per year).
  • Pension-type factor: 1.0 for old-age pension, 0.5 for half-orphan pension, 0.55 for small widow/widower pension, etc.
  • Current pension value: an adjustment value updated every year on 1 July. For 2026, after the West-East alignment, the pension value is about 40.79 € per Entgeltpunkt (early-2026 status).

A worked example: someone who has earned the average for 40 years accumulates 40 EP. With on-time retirement this yields a monthly pension of 40 × 1.0 × 1.0 × 40.79 € = about 1,632 €. Retiring two years early gives 40 × 0.928 × 1.0 × 40.79 € = about 1,514 € – approximately 118 € per month less, permanently.

Important special items:

  • Child-rearing periods raise EP (3 EP per child born from 1992; 2.5 EP for children born before 1992)
  • Periods of unemployment, care or military service can earn EP
  • "Mütterrente" denotes the credit of child-rearing periods before 1992

The pension calculator follows this logic and reports both gross pension and net pension after deduction of health and long-term care insurance.

Parental allowance: basic, Plus and bonus

Parental allowance (Elterngeld) is an income-related family benefit under the Federal Parental Allowance and Parental Leave Act (BEEG). It is intended to give parents financial security in the months after birth.

There are three variants:

Variant Duration amount
Basic Elterngeld Up to 12 months (14 if both parents participate) 65 % of net income, 300 to 1,800 €/month
Parental Allowance Plus Twice as long as basic (24 instead of 12 months) Half amount per month
Partnership bonus Additional 4 months When both parents work part-time at the same time

The basis of calculation is net earnings in the 12 months before the month of birth (for self-employed: the last completed calendar year). From this the Elterngeld net is computed, which may differ slightly from the actual take-home because flat rates for work expenses, tax and social charges are used.

Replacement rates:

  • Standard: 65 % of net income
  • For low prior income (under 1,240 € net): up to 100 %
  • Minimum amount: 300 € per month
  • Maximum amount: 1,800 € per month (basic Elterngeld), 900 € (ElterngeldPlus)
  • Sibling bonus: 10 % uplift (at least 75 €) if an older sibling under 3 years or two under 6 years live in the household
  • Multiple-birth surcharge: 300 € per additional child

Since 2024 there is an income cap: couples with a taxable income above 200,000 € (formerly 300,000 €) no longer receive Elterngeld. For single parents the cap is 150,000 €.

The Elterngeld calculator returns an estimate with the key parameters; the binding calculation is done by the Elterngeld office.

Sickness benefit: after six weeks of continued pay

In case of illness the employer pays full wages for the first six weeks (Continued Remuneration Act, EntgFG). From day 43 the statutory health insurer takes over with sickness benefit – provided the insured is statutorily insured and not a voluntarily insured self-employed person without sickness-benefit cover.

Sickness benefit formula:

  • 70 % of gross pay
  • at most 90 % of net pay
  • capped by the contribution assessment ceiling (for 2026 about 66,150 €/year in GKV)

From the sickness benefit, contributions to pension, unemployment and long-term care insurance (together about 12.75 %, as the health insurance contribution itself is dropped) are deducted. The calculated gross sickness benefit is therefore reduced by these contributions to give the net payout.

Worked example for a gross of 3,500 € and a usual net of 2,300 €:

Step Calculation Value
70 % of gross 3,500 × 0.70 2,450 €
90 % of net (cap) 2,300 × 0.90 2,070 €
Applicable (minimum) – 2,070 €
SI deductions (~12.75 %) 2,070 × 0.1275 -264 €
Net sickness benefit payout approx. 1,806 €

Duration is capped at 78 weeks (546 days) within three years for the same illness. After that the health insurer may examine a reduced-earnings pension.

The sickness-benefit calculator shows the dual cap (70 % gross / 90 % net) and the expected payout.

Unemployment benefit I: flat-rate net benefit pay

ALG I is an insurance-based benefit. Eligibility requires at least 12 months of contributions in the last 30 months before unemployment registration. The amount is based on the flat-rate net benefit pay – not the usual take-home pay:

  • 60 % of flat-rate net benefit pay (childless)
  • 67 % with at least one child (in the sense of the Income Tax Act)

The benefit pay is derived from gross earnings of the last 12 months by deducting flat-rate taxes and social charges. In practice ALG I is therefore typically about 5 to 10 % below the usual take-home.

Duration:

Age Contribution-paying employment in the last 5 years Entitlement duration
under 50 at least 12 months 6 months
under 50 at least 24 months 12 months
from 50 at least 30 months 15 months
from 55 at least 36 months 18 months
from 58 at least 48 months 24 months

The unemployment-benefit calculator reports both the gross and the expected net payout.

Transitions between benefits

In real life these benefits can follow one another:

  • Long illness → 78 weeks of sickness benefit → possibly reduced-earnings pension
  • Unemployment after sickness benefit → ALG I (if entitlement still exists)
  • Parental leave → Elterngeld → possibly part-time work
  • Transition from ALG I to Bürgergeld after entitlement runs out

The various providers cooperate as a rule, but each benefit must be applied for separately.

Common errors

  • Confusing gross pension with net: the statutory pension is also subject to contributions to health and long-term care insurance and possibly taxes.
  • Confusing Elterngeld with parental leave: parental leave is the work-leave period; Elterngeld is the monetary benefit. Parental leave is possible without receiving Elterngeld.
  • Expecting sickness benefit before day 43: until then the employer pays, not the health insurer.
  • Expecting ALG I to equal usual net: no, it is 60 or 67 % of the flat-rate net benefit pay.
  • Ignoring waiting periods: an early old-age pension requires 35 or 45 contribution years.

Conclusion

The four most important wage-replacement benefits each follow their own rules. Knowing them helps you plan major life events – birth, illness, dismissal, retirement – with much more confidence. With the pension calculator, the Elterngeld calculator, the sickness-benefit calculator, the unemployment-benefit calculator and the parental-leave calculator, Ultra-Rechner offers a tailored tool for each one.

Sources

FAQ

Frequently asked questions on this topic

How is the statutory pension calculated?

Using the formula: personal Entgeltpunkte × access factor × pension-type factor × current pension value. Entgeltpunkte are credited per year in proportion to the ratio of personal earnings to the average earnings of all insured.

What does parental allowance typically amount to?

65 % of the pre-birth net income, minimum 300 € and maximum 1,800 € per month under basic Elterngeld. With low prior income the replacement rate can rise up to 100 %.

When does sickness benefit start?

After six weeks of continued pay from the employer, i.e. from day 43 of the illness. Before that the employer pays full wages. Sickness benefit is 70 % of gross pay, up to 90 % of net pay.

Who is entitled to ALG I?

Persons who were subject to social insurance contributions for at least 12 months within the last 30 months before unemployment. Duration varies between 6 and 24 months depending on age and contribution period.

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