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3.
Unemployed for the whole year, insured. Single APW
There is no gross wage. The compensation is 60 per cent of the lost net income for
the single APW with no children, in this case 4 times the level from case 2, i.e. 4 x
4,867.20 = 19,468.80 DEM.
The net compensation percentage is, as mentioned, 60. The compensation is non-
taxable income. The disposable income is 19,469 DEM, when the APW is unem-
ployed for the whole year.
The decrease in disposable income compared to the situation with no unemployment
is 33,349 - 19,469 = 13,880 DEM or 41.6 per cent.
4.
Unemployed for 3 months during the year, not eligible for insurance. 
Single APW
The gross wage is reduced by 14,585 DEM as in case 2. Compensation for 3 months
unemployment is 53 per cent of the lost net wages for the APW without children.
The compensation is 4,297.80 DEM.
The net compensation percentage is, as mentioned, 53, cf. also case 5. The compen-
sation is non-taxable income, but the remaining income is taxed harder via the ’Prog-
ressionsvorbehalt’. With 3 months of this kind of compensation the disposable
income of the APW is 30,604 DEM.
The decrease in disposable income compared to the situation with no unemployment
is 33,349 - 30,604 = 2,745 DEM or 8.2 per cent.
The usual sequence will be the following: When the APW becomes unemployed he
or she will first receive the insurance compensation and then (after e.g. one year) the
lower compensation. Finally the APW again enters occupation.
The case covered here is then the last part of the sequence and will not be an alterna-
tive to the insurance compensation from the first part. There will, however, also be
situations where employees are not eligible for insurance in the first place, and they
will then receive the lower compensation in stead.

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