Legal aid (Germany): How to get financial support for your employment case

Legal aid in Germany allows employees with low income or limited assets to take legal action without having to pay the full court and lawyer fees themselves.  This is especially relevant in labor court when you do not have legal insurance. Because each party must pay its own lawyer – even if you win. Our guide explains the eligibility rules, the application process, which costs are (and are not) covered, and how to avoid the most common pitfalls.

Key takeaways

• Legal aid is state support for people who cannot afford litigation costs but still need to enforce their rights in court. For wrongful termination lawsuits, it is more an exemption.
• Approval of legal aid in Germany requires (1) reasonable prospects of success, (2) no “pointless litigation”, and (3) a financial need.
• The application must be filed with the competent labour court; a dismissal claim must still be filed within three weeks – legal aid does not extend the deadline.
• In first-instance labour court proceedings, each party pays its own lawyer. Legal aid covers your lawyer –  but not the opponent’s in higher instances.
• Depending on income, legal aid may be granted free of charge or with monthly instalments for up to 48 months.
• There is a significant amount of paperwork involved (we are in Germany, after all). So before applying for legal aid, it makes sense to check whether you have legal expense insurance or other arrangements.

What is legal aid in labour law?

Legal aid (Prozesskostenhilfe) exists to ensure access to justice when going to court would otherwise be financially out of reach. In employment disputes, this can be crucial: many employees are reluctant to file a claim because of the cost risk – especially when their salary has just stopped.

In wrongful termination lawsuits (Kündigungsschutzklagen), however, things are sometimes different: many employers are already covered by legal expenses insurance for labour disputes. And in many cases the severance payment at stake is so high that employees can simply pay their lawyer out of the severance they negotiate. 

That said, applying for legal aid involves a fair amount of paperwork (this is Germany, after all). So before submitting an application, it’s worth checking whether you already have legal expenses insurance or can use another financing option.

When legal aid is successfully granted, court fees and your own lawyer’s fees are settled directly with the state. Depending on your financial situation, you may have to repay the costs in instalments. Also, in second-instance appeals, the losing party must also cover the opponent’s lawyer. And these costs are not covered by legal aid, so the cost–benefit analysis becomes more important the further you appeal.

Who qualifies for legal aid?

You qualify if the three following conditions are met:

1. Financial need

The court examines your monthly net income, living expenses, protected allowances, and available assets. The goal is to avoid dipping below the subsistence level. There is no rigid income table anymore; the court assesses each case individually.

2. Prospects of success

The court only checks whether the case is arguable – it does not decide the lawsuit in advance. A typical dismissal claim usually meets this requirement if the employee provides basic facts (date of dismissal, type, missing social justification, etc.).

3. No abusive litigation

Legal aid is refused if the claim is clearly pointless, purely tactical, or disproportionate to the cost risk.

How financial need is calculated

1. Income check – monthly net salary plus regular side income (rent, pensions, ALG, child benefit, etc.).
2. Deduct expenses – rent, commuting costs, reasonable insurance, etc.
3. Deduct legal allowances – fixed amounts for applicant, partner, children (updated annually).
4. Asset check – you must use assets above the protected allowance (usually €10,000 plus €500 per dependent). Pension savings and owner-occupied housing are usually protected.

Having a union lawyer or legal expenses insurance is treated as an existing “asset” because the legal costs are already covered. In that case, legal aid is normally denied unless coverage was refused.

Instalments and repayment

If the court finds that you can contribute, it orders monthly instalments.

• Instalments equal 50 % of the calculated disposable amount.
• If that amount is under €10/month, legal aid is free.
• Instalments run for max. 48 months; anything unpaid after that is written off.
• A later improvement in income (e.g. new job, inheritance, high severance) can trigger retroactive repayment for up to four years after the end of the case.

Applying for legal aid at the labour court

The application is filed with the court handling the dismissal claim. A new application is required for every instance.

Four steps:

1. Complete the official form “Statement of personal and financial circumstances”.
2. Attach proof: payslips, rent contract, bank statements, asset documents.
3. Indicate the lawyer you want the court to assign (if representation is requested).
4. Submit together with the claim or immediately afterwards.

Even without a lawyer, employees can file through the court’s free legal filing office. However, a specialised employment lawyer can improve both the prospects assessment and the completeness of the application.

Legal aid does not stop the three-week deadline

A dismissal is only challengeable if the lawsuit reaches the labour court within three weeks of receiving the written notice. Filing only the legal aid application does not protect the deadline. The claim must be filed unconditionally, even if legal aid is still pending. Labour courts do not charge court fees upfront, so you can file first and let the legal aid decision follow.

Some lawyers offer no-win-no-fee agreements in labour law, which can be lawful in certain constellations (e.g. clear financial outcome such as severance). This may help employees who neither qualify for legal aid nor have insurance.

FAQ – Legal aid (Germany)