Social security 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)


Main articles: Unemployment benefits § Germany , and Unemployment in Germany
  • Bundesagentur für Arbeit

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) is mandatory for both employees and employers. All employees with a regular employment contract, except for 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 the labor market. Contributions are paid only to earnings up to the social security ceiling (2012: EUR 5,600). The system is largely self-financed but also receives a subsidy from the state of the Job Centers.

Unemployed workers are entitled to:

  • Living allowance known as unemployment benefit
  • Help in finding work
  • Training

12 months before 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, or 67% for claimants with children. The maximum benefit is therefore 2,964 euros (in 2012).

Unemployment benefit II

If a worker is not eligible for the full unemployment benefit after receiving full benefit for the maximum of 12 months, he is able to apply for the benefits of the so-called Hartz IV program, an open-ended welfare program. A person receiving Hartz IV benefits is paid EUR 409 (2017) a month for living expenses plus the cost of adequate housing (including heating) and health care. Couples can receive benefits for each partner. 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 to the recipient’s bank account.

Health insurance

Main article: Healthcare in Germany

Germany : has a universal [1] multi-pay health care system with two main kinds of health insurance: „Statutory Health Insurance“ ( Gesetzliche Krankenversicherung ) Known as sickness fund ( 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 threshold of almost 50,000 euros per year are automatically enrolled in a public non-profit „sickness funds“ at common rates for all members, and is paid for . Provider payment is negotiated in complex corporatist social bargaining among specified self-educated bodies (eg physicians‘ associations) at the level of federal states(Lander). The sickness funds are mandated to provide a single and broad benefit package and can not refuse membership or otherwise discriminate on an actuarial basis. Social welfare benefits are also enrolled in statutory health insurance, and municipalities pay contributions on behalf of them.

In addition to the „Statutory Health Insurance“ ( Gesetzliche Krankenversicherung ) covering the vast majority of residents, $ 50,000 ( US $ 56,497), 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, additional insurers provide various types of supplementary coverage for the benefit package (eg for glasses, coverage and additional dental care or more sophisticated dentures).

The health economics of Germany sector was about US $ 368.78 billion (US $ 287.3 billion) in 2010, equivalent to 11.6 percent of gross domestic product (GDP) this year and about US $ 4,505 (US $ 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 was a very low mortality rate (4.7 per 1,000 live births3.3 per 1,000 persons, and 3.3 per 1,000 persons. In 2001 total expenditure on health amounted to 10.8 percent of gross domestic product. [7]


Main article: Pensions in Germany


Main article: Invalidity in Germany

Child support

Main article: Child care in Germany

The child care system in Germany can be seen as universal in coverage, though regulations vary from May Land to Land, entre and west Germany and east Germany . It is viewed as a public problem by parents, regional and local governments, non-profit organizations (usually churches) etc. Germany offers a wide-range of child care programs for parents, day care centers (Krippe) for children up to age 3, preschool programs ( Kindergarten ) for children from age 3 to 6, primary schools (Hort) for school-age children. Around nighty-eight per cent of German day care is non-for-profitand is heavily funded by the government. Nighty per cent of the costs are paid by state, by the parents [8]. In western Germany, the regulations in the state of the land (Landesjugendamt) in each Land, which distributes funds according to a certain amount. Even though the enforcement is in a relatively decentralized form. For example, child / staff ratios vary from 17/1 to 25/1; group sizes of 25 in kindergartens; and training requirements for teachers. German child care system values ​​highly of the quality of teaching staffs. In every German Land, a two-year-old praktikum , two years of college, and one year of additional praktikum (berufspraktikum) [9]. The requirements of the training of teachers There is no big market for private day care in Germany. Only 4% to 10% of mothers employing child minders (Tagespflege) in 1995 [10] . The main reason for this is that private child care providers can not maintain profitability when facing the competition. And the high barrier to enter the market by the government becomes one of the hinders.

Although general conditions of the child care system may 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 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 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 icts form 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 [11] [12] . Child care policies in Germany focus on children’s development and equal opportunities to succeed after kindergarten. THUS it Explains That the fact Germany AIMS to Provide high-quality early education for children goal set the opening hours of day care centers to be short and not convenient to the working parent [13] .

In many social studies, child care policy with social norms on gender roles have cast large impact on women’s participation in labor force and fertility choice. Having one of the lowest fertility rates 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, in the face of the dilemma between work and family [14] . In West Germany, female participation in the labor market is low as in German income tax system. Even for women who have jobs, they usually stop working at the birth of the child. 3-year period of parental leaveis provided by the government, with low cash benefits paid under the terms of health insurance. Women tend to stay as housewives when growing up and growing up. Full-time employment rates are even lower [15]. In East Germany, however, it is one of the highest rates of female participation among European countries. As high as 85 percent of adult women, including those with young kids, in the labor market. For working mothers, there are several informal child care arrangements they could have. They usually 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 aged 3 to 6 expect full-day preschool program [16] .

Apart from maternity leave, parents are entitled to a paid leave if their children are ill at home.

Social care

Main article: Social care in Germany


The social security system in Germany is funded by employees and employers. The contributions are paid on all the 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 hours contracts. Applies to companies with fewer than 30 employees
Maternity leave Rate 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 Federal Reserve. In 2013 they totaled 247 million euros [17]
Holiday pay Financed by companies


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  17. Jump up^ Financial results of the Employment Agency