Welfare in Germany
Social security in Germany is codified on the Sozialgesetzbuch, or the "Social Code", contains 12 main parts, including the following,
- Unemployment insurance and public employment agencies (SGB II and III)
- Health insurance (SGB V)
- Old age pension insurance (SGB VI)
- Invalidity insurance (SGB VII and IX)
- Child support (SGB VIII)
- Social care (SGB XI)
Contents
Unemployment
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Unemployment benefit I
The unemployment benefit I in Germany is also known as the unemployment insurance. The insurance is administered by the federal employment agency 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 1.5% of their gross salary below the social security threshold and employers pay 1.5% contribution on top of the salary paid to the employee. The contribution level was reduced from 3.25% for employees and employers as part of labour market reforms known as Hartz. Contributions are paid only on earnings up to the social security ceiling (2012: 5,600 EUR). 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 preceding their loss of a job. The allowance is paid for half of the period that the worker has contributed. 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 2964 Euros (in 2012).
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 399 EUR (2015) 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
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Germany has a universal[1] 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).[2][3][4]
Health insurance is compulsory for the whole population in Germany. Salaried workers and employees below the relatively high income threshold of almost 50,000 Euros per year are automatically enrolled into one of currently around 130 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$Expression error: Unrecognized punctuation character "[".), 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 health economics of Germany sector was about US$368.78 billion (€287.3 billion) in 2010, equivalent to 11.6 percent of gross domestic product (GDP) this year and about US$4,505 (€3,510) per capita.[5] According to the World Health Organization, Germany's health care system was 77% government-funded and 23% privately funded as of 2004.[6] In 2004 Germany ranked thirtieth in the world in life expectancy (78 years for men). It had a very low infant mortality rate (4.7 per 1,000 live births), and it was tied for eighth place in the number of practicing physicians, at 3.3 per 1,000 persons. In 2001 total spending on health amounted to 10.8 percent of gross domestic product.[7]
Pensions
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Invalidity
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Child support
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Social care
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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 2013 | 9,45 % | 9,45 % | Ceiling: West Germany €69,600, East Germany €58,800 |
| Health insurance | January 2011 | 7,3 % | 8,2 % | Ceiling: €48,600 |
| Unemployment in Germany | January 2011 | 1,5 % | 1,5 % | Ceiling: West Germany €69,600, East Germany €58,800 |
| Invalidity Insurance | January 2013 | 1,025 % | 1,025 % | 0,25 % supplement for childless employees In Saxony 0,525 % for employer and 1,525 % for employee |
| Accident Insurance | 1,6 % | -- | 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 2013 | 0,15 % | -- | The contribution rate is adjusted according to the reserves managed by the Federal employment agency. In 2013 they totaled 247 Million euros[8] |
| Holiday pay | -- | Financed by companies |
Notes
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- ↑ Health Insurance in Germany – Information in the English & German Language
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- ↑ A. J. W. Goldschmidt: Der 'Markt' Gesundheitswesen. In: M. Beck, A. J. W. Goldschmidt, A. Greulich, M. Kalbitzer, R. Schmidt, G. Thiele (Hrsg.): Management Handbuch DRGs, Hüthig / Economica, Heidelberg, 1. Auflage 2003 (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.
- ↑ Financial results of the Employment Agency
