Statutory social insurance
The social insurance scheme in Germany is a statutory insurance system providing effective protection in case of major crises and their consequences such as illness, unemployment and long-term care needs. The aim is to provide each individual with a stable standard of living, provide support and a pension when people have left employment.
The social insurance scheme is a mandatory form of insurance. Half of the statutory social insurance contributions are paid by the employer. The other half is paid by the employee. It is automatically deducted from their salary or wages. There are two exceptions: Employees pay slightly more than employers for their health insurance, whilst employers pay the full contribution for accident insurance. You acquire an entitlement to benefits from the different areas of the statutory social insurance scheme by making these contributions.
The contribution payable to social insurance is calculated in accordance with income as a matter of principle. Contributions towards health and pensions insurance are however capped at a specific level of income (known as the contribution assessment ceiling).
The pensions insurance scheme
All employees are subject to mandatory statutory pensions insurance. The pensions insurance scheme ensures that you are financially secure in your old age.
The arrangement until 2012 was that, as a rule, you would be paid a pension when you reached the age of 65. The retirement age is subsequently being increased to 67 in stages. This age limit will then apply to anyone born after 1964 from 2029 onwards. However, there will be exceptions, for example for people who have paid into the pension scheme for a particularly long time.
The pensions insurance scheme also supports you if you become unable to work during your working life, meaning that you are unable to work at all, or only to a certain degree, or if you are widowed or an orphan.
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The statutory health insurance helps you and your family when you are ill.
In addition it pays for many costs of healthcare provision (e.g. the dentist), as well as paying for rehabilitation measures and the costs of childbirth.
If you cannot work for a prolonged period because of illness and therefore do not receive your salary from your employer, the statutory health insurance pays you sick pay (Krankengeld) as an equalisation payment.
Statutory health insurance cover is mandatory for employees up to a specific income level (general or special annual remuneration ceiling). Above this ceiling, you can select whether you wish to remain in the statutory health insurance or join a private scheme. You are obliged to select one of these variants. It is not possible to do without health insurance altogether.
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Long-term care insurance
Long-term care insurance will help you if you cannot look after yourself in old age or because of a severe illness and are dependent on long-term care. In addition, long-term care insurance provides financial support and advice to those who care for their relatives. You will always need to submit an application if you would like to claim benefits from the long-term care insurance scheme.
If you have statutory health insurance, you are automatically a member of the statutory long-term care insurance scheme. If however you are insured with a private health care insurance scheme, you must take out an additional private long-term care insurance policy.
The statutory accident insurance helps you and your family cope with health and financial problems that are the immediate consequence of an accident at work or occupational illness. Accidents at work also include accidents on the way to and from work or school.
Unemployment insurance is also part of the statutory social insurance. Everyone is insured with the exception of those in negligible employment (geringfügige Beschäftigung). You can find out more on the subject of support for the unemployed by following "On the topic" in the right-hand column.