Laid off by company, need suggestion for rest of the time.

[Absolute@ET]

Hello, I need some opinion/suggestion but first let me explain the situation.
I have been working in a company from last 12 years and now I am getting laid off. I still have more than one year to look for a new job and before that i would go for a garden leave for 6 months. My plan is to travel during garden leave and also up-skill myself but the reason i am writing here is that i would like to have your suggestion/opinion on below topic.

1. Is it okay to inform Agentur für Arbeit now (one year in advance) or should i wait before I start my garden leave (the usual time I was recommended by my company)? The reason i am thinking to inform them now is if they would support in up-skilling or improving my German language skills or do BfA only support once the unemployment period start? Is it recommendable to inform BfA in that advance? Pro and cons?
2. If you were in my situation what would you concentrate on? Given the free time with garden leave, how would you spend that time?
3. Is there something I should know based on your experience that would help me in this process?
4. Any other advice you would like to share?

I would like to prepare myself for future challenges by using this free time and at the same time also want to spend the days traveling and enjoying and so I would be happy if you would share your experience/advice/recommendations.
Thank you in advance.

[Nixon]

I don’t have a comment but a question. Garden leave, what is that?

[Krieg]

I don’t have a comment but a question. Garden leave, what is that?

They continue paying your salary for some months until the contract finishes but you do not have to work.

[Nixon]

Do they stop paying you if you start working somewhere elde, and how is that amount taxed?

I am in a company for over 10 years now. If they fire me they should give me 5 more monthly paychecks, plus current month. How would those 5 paychecks be taxed?

[Krieg]

Yes, they stop paying you if you find a new job, at least that's the standard offer. You of course can try to negotiate whatever else.

If you have a six months Freistellung (notice time) then that would be normal salary. If the payment is however an Abfindung (severance pay) then it will be taxed as normal non-salary income in the current fiscal year, which might be bad because it might make you jump to a higher tax bracket and then your WHOLE year income, including your salary, will be taxed at the higher bracket. To avoid this you can apply for a Fünftelregelung which basically divide the Abfindung in five and you pay taxes for it in the next five years. But check recent changes for this because AFAIK something will be changed from 2025 and I don't know the details.

[Absolute@ET]

Yes, i will get paid until the end of my contract (including the notice period) and i will receive severance pay at the last day of work which is actually next year November end and as you said then it will go to higher tax category. Thanks for the Fünftelregelung information. I will look into it.