Social security in Germany
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Social security in Germany is codified on the Sozialgesetzbuch (SGB), or the "Social Code", contains 12 main parts, including the following,
- )
- Health insurance (SGB V[3])
- Old age, widow's/widower's, orphans and disability pension insurance (SGB VI[4])
- Invalidity insurance (SGB VII[5] and IX[6])
- Child support (SGB VIII[7])
- Social care (SGB XI[8])
Unemployment
Unemployment benefit I
The unemployment benefit I in Germany is also known as the unemployment insurance. The insurance is administered by the Bundesagentur für Arbeit (Federal Employment Agency, BA) and funded by employee and employer contributions. This in stark contrast to FUTA in the US and other systems; where only employers make contributions. Participation (and thus contributions) are generally mandatory for both employee and employer. All workers with a regular employment contract, except freelancers and certain civil servants, contribute to the system. Since 2006, certain previously excluded workers have been able to opt into the system on a voluntary basis.
The system is financed by contributions from employees and employers. Employees pay 1.2% of their gross salary below the social security threshold and employers pay 1.2% contribution on top of the salary paid to the employee. The contribution level was reduced from 1.3% for employees and employers during the COVID-19 pandemic. Contributions are paid only on earnings up to the social security ceiling (2021: 7,100 EUR in western Germany and 6,700 EUR in the former GDR). The system is largely self-financed but also receives a subsidy from the state to run the Job centers.
Unemployed workers are entitled to:
- Living allowance known as unemployment benefit
- Help in finding work
- Training
Unemployed benefit is paid to workers who have contributed at least during 12 months in a 30 month period preceding their loss of a job. The allowance is paid for 12 months to claimants below the age of 50. Above the age of 50 the allowance period climbs up to 24 months at the age of 58, provided the claimant has contributed for at least 48 months. Claimants get 60% of their previous net salary (capped at the social security ceiling), or 67% for claimants with children. The maximum benefit is therefore 2382,60 euros (in 2021).
Unemployment benefit II
If a worker is not eligible for the full unemployment benefits or after receiving the full unemployment benefit for the maximum of 12 months, he is able to apply for benefits from the so-called Hartz IV programme, an open-ended welfare programme. A person receiving Hartz IV benefits is paid 432 EUR (2020) a month for living expenses plus the cost of adequate housing (including heating) and health care. Couples can receive benefits for each partner including their children. Additionally, children can get "benefits for education and participation". Germany does not have an EBT (electronic benefits transfer) card system in place and, instead, disburses welfare in cash or via direct deposit onto the recipient's bank account.
Health insurance
Germany has a universal[9] multi-payer health care system with two main types of health insurance: "Statutory Health Insurance" (Gesetzliche Krankenversicherung) known as sickness funds (Krankenkasse) and "Private Health Insurance" (Private Krankenversicherung).[10][11][12]
Health insurance is compulsory for the whole population in Germany. Salaried workers and employees below the relatively high income threshold of more than 60,000 euros per year[13] are automatically enrolled into one of currently around 105[14] public non-profit "sickness funds" at common rates for all members, and is paid for with joint employer-employee contributions. Provider payment is negotiated in complex corporatist social bargaining among specified self-governed bodies (e.g. physicians' associations) at the level of federal states (Länder). The sickness funds are mandated to provide a unique and broad benefit package and cannot refuse membership or otherwise discriminate on an actuarial basis. Social welfare beneficiaries are also enrolled in statutory health insurance, and municipalities pay contributions on behalf of them.
Besides the "Statutory Health Insurance" (Gesetzliche Krankenversicherung) covering the vast majority of residents, the better off with a yearly income above almost €50,000 (US$59,135), students and civil servants for complementary coverage can opt for private health insurance (about 11% of the population). Most civil servants benefit from a tax-funded government employee benefit scheme covering a percentage of the costs, and cover the rest of the costs with a private insurance contract. Recently, private insurers provide various types of supplementary coverage as an add upon of the SHI benefit package (e.g. for glasses, coverage abroad and additional dental care or more sophisticated dentures).
The
Pensions
Child support
The child care system in
Although general condition of the child care system can be applied to most of the cases and regions in Germany, there are noticeably big regional differences, especially between west and east Germany. The regional variations in child care supply reflect the fact that regulations are being made at the local community level. According to Tietze, Rossbach & Roitsch survey in 1994, there are variations in the supply of day care services between rural and urban areas, with rural areas being at a disadvantage. In east Germany, there are much larger number of day care slots than in west Germany and higher rate of child care provision, as an inheritance from its former socialist German Democratic Republic. The opening hours of the day-care centers vary as well. In west Germany the opening hours of Kindergarten are short, only for half of the day; while in east Germany 97% of the kindergarten offers all-day care including lunch.[21][22] Child care policies in Germany focus more on children's development and equal opportunities to succeed after kindergarten rather than focusing on helping to solve the compatibility of work and family for parents. Thus it explains the fact that Germany aims to provide high-quality early education for children but set the opening hours of day care centers to be short and not convenient to the working parents.[23]
In many social studies, child care policy together with social norms about gender roles have cast big impact on women's participation in labor force and fertility choice. Having one of the lowest fertility rate among European countries, Germany has on average 1.38 children per woman in 2008 and it keeps on having high level of childlessness among parents. Women in Germany, as in many other countries, face the dilemma between work and family.[24] In west Germany, female participation in labor market is low as German income tax system discourages women from labor market due to high unemployment rate. Even for women who have jobs, they usually stop working at the birth of the child because mothers are seen as the best child care providers. 3-year period of parental leave is provided by the government, with low cash benefits paid under the terms of health insurance. Women tend to stay as housewives when kids are young and return to part-time works after their children grow older. Full-time employment rates are even lower.[25] In east Germany, however, it witnesses one of the highest female labor participation rate among European countries. As high as 85 per cent of adult women, including those with young kids, participate in labor market. For working mothers, there are several informal child care arrangements they could have. Usually they have their children to be cared for by grandparents or other close relatives. Others send their kids to day care centers. 60% of east German children under age 3 are cared for by the day centers and over 90% of children aged 3 to 6 attend full-day preschool program.[26]
Apart from maternity leave, parents are also entitled to a paid leave if their children are ill at home.
Funding
The social security system in Germany is funded through contributions paid by employees and employers. The contributions are paid on all direct wages as well as indirect wages up to a ceiling.
Type | Last change | Employer contribution rate | Employee contribution rate | Notes |
---|---|---|---|---|
State Pension | January 2018 | 9.30% | 9.30 % | Ceiling: West Germany €85,200, East Germany €80,400 |
Health insurance |
January 2015 | 7.3% | 7.3% | Ceiling: €58,050 |
Unemployment in Germany | January 2020 | 1.2% | 1.2% | Ceiling: West Germany €85,200, East Germany €80,400 |
Invalidity Insurance | January 2019 | 1.525% | 1.525% | 0.25% supplement for childless employees In Saxony 1.025% for employer and 2.025% for employee |
Accident Insurance | 1.3% | -- | varies by sector depending on risk | |
Sick pay insurance | between 1.5% & 3.6% | depends on the proportion of employees on short hour contracts. Applies to companies with fewer than 30 employees | ||
Maternity leave | -- | Rate set by the health insurance company depending on the wage bill | ||
Wage guarantee fund | January 2020 | 0.06% | -- | The contribution rate is adjusted according to the reserves managed by the Federal employment agency. In 2013 they totaled 247 Million euros[27] |
Holiday pay | -- | Financed by companies |
Notes
- ^ "SGB 2 - nichtamtliches Inhaltsverzeichnis". www.gesetze-im-internet.de. Federal Ministry of Justice and Consumer Protection. Retrieved 17 April 2020.
- ^ "SGB 3 - nichtamtliches Inhaltsverzeichnis". www.gesetze-im-internet.de. Federal Ministry of Justice and Consumer Protection. Retrieved 17 April 2020.
- ^ "SGB 5 - nichtamtliches Inhaltsverzeichnis". www.gesetze-im-internet.de. Federal Ministry of Justice and Consumer Protection. Retrieved 17 April 2020.
- ^ "SGB 6 - nichtamtliches Inhaltsverzeichnis". www.gesetze-im-internet.de. Federal Ministry of Justice and Consumer Protection. Retrieved 17 April 2020.
- ^ "SGB 7 - nichtamtliches Inhaltsverzeichnis". www.gesetze-im-internet.de. Federal Ministry of Justice and Consumer Protection. Retrieved 17 April 2020.
- ^ "SGB 9 - nichtamtliches Inhaltsverzeichnis". www.gesetze-im-internet.de. Federal Ministry of Justice and Consumer Protection. Retrieved 17 April 2020.
- ^ "SGB 8 - nichtamtliches Inhaltsverzeichnis". www.gesetze-im-internet.de. Federal Ministry of Justice and Consumer Protection. Retrieved 17 April 2020.
- ^ "SGB 11 - nichtamtliches Inhaltsverzeichnis". www.gesetze-im-internet.de. Federal Ministry of Justice and Consumer Protection. Retrieved 17 April 2020.
- PMID 12061488. Retrieved March 10, 2013.
As Germany has the world's oldest SHI [social health insurance] system, it naturally lends itself to historical analyses.
- ^ "The Case for Universal Health Care in the United States". Cthealth.server101.com. Retrieved 2011-08-06.
- ^ Health Insurance in Germany – Information in the English & German Language
- ^ DiPiero, Albert (2004). "Universal Problems & Universal Healthcare: 6 COUNTRIES — 6 SYSTEMS" (PDF). Archived from the original (PDF) on 21 February 2006.
- ^ admin (2020-03-09). "Jahresarbeitsentgeltgrenze". DRV (in German). Retrieved 2020-10-23.
- ^ "Krankenkassen-Fusionen: Fusionskalender - Krankenkassen.de". www.krankenkassen.de. Retrieved 2020-10-23.
- ISBN 3-87081-300-8): S. C3720/1-24, with 3 revisions / additional deliveries until 2012
- ^ World Health Organization Statistical Information System: Core Health Indicators
- ^ Germany country profile. Library of Congress Federal Research Division (December 2005). This article incorporates text from this source, which is in the public domain.
- JSTOR 10.3138/9781442672178.10.
- S2CID 154073586.
- S2CID 55338940.
- S2CID 55338940.
- JSTOR 3600025.
- JSTOR 2584762.
- JSTOR 41342813.
- JSTOR 3600025.
- JSTOR 23713548.
- ^ Financial results of the Employment Agency
External links
- Social Security at a Glance, brochure by the German Ministry of Labour and Social Affairs, 2017