Support schemes for unemployed persons aiming to become self-employed have been recently reformed several times. In 2003, the start-up-subsidy (Existenzgründungszuschuss) was added to the existing bridging-allowance (Überbrückungsgeld) and the two programs to-gether led to a strong increase in the number of supported start-ups. In 2006 both instruments were merged to the start-up allowance (Gründungszuschuss). Since the bridging allowance has been evaluated as effective and efficient and the start-up-subsidy reached new target groups, the latest reform shows several short-comings. First of all, an end of the start-up boom is to be expected with the newly attracted target groups not being reached anymore. Secondly, the design of the start-up allowance is suboptimal, where efficiency losses can be expected if participants aim at maximizing social transfers. First empirical evidence from data of 2007 supports most of these expectations.