Who will be allowed to earn extra income from January onwards?
3. December 2025
From 1 January, stricter rules will apply to unemployed people. Only certain groups will be allowed to earn a small amount of extra income. What to do now.
From 1 January 2026, anyone receiving unemployment benefit or emergency assistance will no longer be allowed to earn additional income up to the marginal employment threshold of £551.10 gross per month, as was previously the case. If they do so anyway, they will no longer be considered unemployed and will lose their entitlement to AMS benefits.
What is marginal employment?
This includes all possible sources of income: income from freelance or genuine employment, but also income from self-employment that is exempt from compulsory insurance, or income from agriculture and forestry. Who can continue to earn additional income? The new ban will be cushioned, however. There will be exceptions for four groups from January onwards:
1. Those continuing with a side job: Anyone who had a minor side job for at least 26 weeks without interruption alongside their fully insured main job before becoming unemployed may continue to do so while unemployed.
2. Long-term unemployed: Anyone who has received unemployment benefit or emergency assistance for at least one year may take on a minor job for a maximum of 26 weeks.
3. Long-term unemployed persons aged 50 or over or with disability status: They may continue to earn a minor additional income if they have already received money from the AMS for at least 365 days (sickness benefit is treated as equivalent).
4. Persons returning to work after at least one year of illness or rehabilitation: They may work on a minor basis for a limited period of up to 26 weeks.
How to prepare?
Anyone who is currently receiving money from the AMS and is likely to still be doing so on 1 January and is in marginal employment without falling into one of the four groups mentioned above must terminate their marginal employment by 31 January 2026 at the latest. Otherwise, they will no longer be considered unemployed retroactively from 1 January and their benefits from the AMS will be suspended. If you are only employed on a minor basis on a daily basis, your benefits will be suspended for those days on which you were registered as being in minor employment. What should those affected and their employers do now? Employers should actively seek dialogue with their marginal employees to clarify whether they are receiving unemployment benefits or emergency assistance and whether one of the legal exceptions could apply. If it becomes apparent that no exception applies, timely planning is essential, advises Nicolaus Mels-Colloredo, a solicitor specialising in labour law and partner at PHH.
Although employers are not obliged to protect their marginal employees from negative effects on AMS benefits, they also stand to gain from doing so: if employees resign at short notice, this results in increased costs,
duty rosters have to be redrawn, and there is a risk of staff shortages, according to Mels-Colloredo. This is particularly true in sectors with a high proportion of marginal employees, such as retail, catering, cleaning and care.
When to resign?
Resignation must take place by 31 January 2026 at the latest. If you realise this late and the notice period is too long, you should try to negotiate a mutually agreeable termination with your employer: under certain conditions, this can also be done at short notice in January, as long as the employment relationship ends by 31 January at the latest, confirms Mels-Colloredo. Are there any problems if payments from the already terminated employment relationship are still being made after 31 January? Subsequent payments such as late payslips or special payments are harmless as long as they can be clearly attributed to a period before 31 January 2026. It is important to ensure a clean, documented termination of the employment relationship and transparent processing of payments, emphasises Mels-Colloredo.
First published in: Gewinn on 3 December 2025
Editor: Susanne Kowatsch