Social Insurance System

in Germany

Agenda

Conclusion

History

Future Prospects

3

5

1

2

Benefits

Financing

4

2

6

Other Countries

History

3

1883 Introduction of health insurance 1884 Introduction of accident insurance 1889 Introduction of pension insurance

1927 Introduction of unemployment insurance

1995 Introduction of nursing care insurance

1871 Foundation of Germany

1918 Foundation of Weimar Republic

1933 Hitler‘s rise to power

1949 Divison of Germany

1990 Reunification of Germany

Present Situation

• Obligation to obtain insurance

• Five parts of social insurance

• Solidarity Principle (Paying ≠ Receiving)

• Contribution rate depends on income

• Contribution rates are paid partly by employer and employee Exc: Mini-Job

4

Nursing Care

Accident Unemployment

Pension

Health

Agenda

Conclusion

History

Future Prospects

3

5

1

5

Benefits

Financing

4

2

6

Other Countries

Unemployment Insurance

• Compulsary for all employees except self-employed people

• 2006: 6,5% 2017: 3% of brut salary

6

Insurance that provides financial support for job-seeking people

Health Insurance

• Choice between public and private health insurance

• Private insurance rates are based on age, health situation and sex

• Since 2015: 50/50 employer/employee

constantly 14%

7

Insurance that finances the treatment of illnesses and provides financial support during pregnancies

Pension Insurance

• Assessment system

• 2016: 86 billion € of governmental grant

• 6200 € monthly salary as counting limit

• 1891: 1,7% 2017: 18,7% 2030: 22%

8

Insurance that provides financial support for people in pension, early pension and possible widowers or orphans

Nursing Care Insurance

• Only insurance that distinguishes between insurants with and without children

• 4350€ monthly salary as counting limit

• 1995: 1% 2017: 2,35% of brut salary

9

Insurance that finances home care or a stay in an old people‘s home in case of dependecy care

Accident Insurance

• Insurance has to be paid fully by employer

• Contribution rate depends on the sum of paid salary and the danger index of the company

e.g. University 1,5

Football Club 57,8

10

Insurance that finances measurements to prevent accidents and pay compensation in case of an accident

Contribution Rates

Health Insurance 14,6% (7,3% each)

Nursing Care Insurance 2,55% / 2,8% (childless) (1,275%/ 1,4% each)

Pension Insurance 18,7% (9,35% each)

Unemployment Insurance 3% (1,5% each)

Accident Insurance only employer pays to respective insurance company (rate varies by danger index)

39,1% / 19,45%

11

Sample Calculation

Brut Salary 3000€

Health Insurance 438€ 219,00€

Nursing Care Insurance 74,60€ 37,30€

Pension Insurance 561€ 280,50€

Unemplyoment Insurance 90€ 45,00€

581,80€

12

Sample Calculation

2418,20€

[Man,single,no children,catholic]

Income Tax 433,00€

Solidarity Supplement 23,81€

Church Tax 38,97€

495,78€

N Net Salary: 1922,42€

13

Agenda

Conclusion

Developement

Future Prospects

3

5

1

14

Benefits

Financing

4

2

6

Other Countries

Unemplyoment

Unemployment Benefit I

• 60% of last net salary

• 67% in case of at having at least one child that receives child benefit

• Payable only after at least 12 months of employment

• Payable max. 12 months

Exc: employees older than 50 24 months

15

Unemplyoment

Unemployment Benefit II • Everyone older than 15, unemployed, and

without other governmental benefits is eligible to apply

• 409€ per Person + rent + health insurance

• Obligation to visit job centre and to participate in job finding measurements

16

Health

• Full or partly payment for medical treatment

• Less to no payment in case of alternative treatments such as homeopathy or osteopathy

• No payment in case of treatment for optical reasons such as teeth- whitening or eye laser treatment

17

Pension

• Payout depends on In-Payment

• 2015: 1176€ average pension ♂

• Age for full pension: 67 (everyone born after 1964), 66 for people born in 1958

• Theoretically possible from 63 on: 3,6% less payout per year

18

Nursing Care

19

• Five different “need of care“ degrees

• Maximum of 901€ per month

• Equals at least 300 minutes of daily care

• Individual choice if nursing care is done at home or at an elderly‘s home

Agenda

Conclusion

Developement

Future Prospects

3

5

1

20

Benefits

Financing

4

2

6

Other Countries

Taxes and Duties in Europe

Income Tax Social Insurance

21

Source: OECD

Germany

Italy

France

Sweden

Poland

USA

UK

Switzerland

Specialties in other countries

France: Tax on Alcohol Mix drinks and advertisment for medicaments co-finances health insurance

Poland: If a male person retires with 65 instead of 67 he will have a 50% lower pension

Latvia: 87% of net salary in the first month of unemployment (highest in the world)

22

Agenda

Conclusion

Developement

Future Prospects

3

5

1

23

Benefits

Financing

4

2

6

Other Countries

Future Prospects

Financing

• Raise of pension contribution rate

Benefiting

• Prolongating unemployment benefit I

• Raise of retirement age to at least 70

• Unconditional Basic Income

24

Agenda

Conclusion

Developement

Future Prospects

3

5

1

25

Benefits

Financing

4

2

6

Other Countries

Conclusion

• Germany is the country with the highest social security contributions worldwide

• Demographic change will worsen the situation

• Unemployment Money II enables to survive but not to live, same applies to many people receiving pension, especially women

• The system in general provides to less financial support

considering the inpayments

26

Thank you for you attention!

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Sources

• Bpb (2012): Wirtschaft-Ökonomische Grundbegriffe, Bonn:bpb

• Jäger, Horst (2013): Einführung in die Sozialversicherung und in die sonstigen

Bereiche des Sozialrechts, Berlin: Schmidt

• Berliner Zeitung (2017):VERGLEICH - Andere Länder, andere Sozialversicherungssysteme in: http://www.berliner-zeitung.de/15721812 (as of 17.03.2017)

• BpB (2009): Das deutsche Sozialversicherungssystem in: https://www.bpb.de/politik/grundfragen/24-deutschland/40478/sozialversicherungssystem (as of 25.02.2017)

• European Commission (2013): Your social security rights in Germany, in: http://ec.europa.eu/employment_social/empl_portal/SSRinEU/Your%20social%20security%20rights%20in%20Germany_en.pdf (as of 24.02.2017)

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Sources

• Kaiser, Tobias (2014): Deutschland ist bei Abgabenlast absolute Weltspitze in: https://www.welt.de/wirtschaft/article126829990/Deutschland-ist-bei-Abgabenlast-absolute-Weltspitze.html (as of 04.03.2017)

• N.N. (2016): Social Security System in Germany in: https://www.internations.org/germany-expats/guide/15984-social-security-taxation/social-security-in-germany-15970 (as of 08.03.2017)

• N.N. (2015): Das deutsche Sozialversicherungssystem in: https://www.justlanded.com/deutsch/Deutschland/Landesfuehrer/Jobs/Sozialversicherung (as of 16.03.2017)

• The Telegraph (2013): Benefits in Europe – Country by Country in: http://www.telegraph.co.uk/news/worldnews/europe/10391238/Benefits-in-Europe-country-by-country.html (as of 22.02.2017)

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