Germany to raise care insurance contributions for people without kids

Health Minister Nina Warken (CDU) is planning a reform which would see residents without children pay even higher long-term care insurance contributions. Here’s what we know so far:

Warken planning insurance hike for childfree residents

Germany’s CDU/CSU-SPD coalition government is looking to save money in the short term and has taken the approach of cutting back several social security measures, including healthcare, parental allowance, and pensions.

The latest suggestion from Health Minister Nina Warken is to increase the long-term care insurance (Pflegeversicherung) surcharge for residents without children, according to a report from RedaktionsNetzwerk Deutschland (RND).

Everyone who works in Germany is required to make long-term insurance contributions, which are deducted from their income. These contributions ensure that everyone who needs long-term nursing care, whether due to accident, illness or old age, can receive the care they need when they need it, without it burning a hole in their pocket.

Employees in Germany currently pay a base rate of 3,6 percent of their annual income towards long-term care insurance. People aged over 23 and without children pay an additional “surcharge” of 0,6 percent. Warken’s plan is to increase this surcharge to 0,7 percent, bringing the overall contribution for people without children to 4,3 percent.

Employees with children would continue to pay existing rates: 3,6 percent for those with one child, 3,35 percent for those with two children and 3,1 percent for those with three children. This progressive system is based on a 2001 ruling from the Federal Constitutional Court that parents should pay lower premiums because they raise children who will contribute in the future.

What other cuts is Warken considering?

Germany’s birthrate is currently at its lowest level since the Second World War. At the same time, older people are living longer. This demographic change is bringing the social security system, which uses contributions paid by the working-age population to fund pensions, healthcare and long-term care, out of balance.

According to Warken’s projections, Germany’s long-term care insurance system will see a deficit of 22 million euros in the next two years unless changes are made. The CDU minister has also proposed cutting government subsidies that help people cover nursing home costs, introducing stricter eligibility requirements for benefits and increasing premiums for high-income residents.

According to the results of an ARD survey published in May, 52 percent of respondents were against the government making cuts to social security benefits, namely unemployment benefits, statutory health insurance, pension insurance and long-term care insurance to reduce government spending.

The overall survey found that 64 percent of people were in favour of reintroducing a wealth tax in Germany, and 81 percent of people believe wealth is unfairly distributed in the federal republic.

Warken’s proposal to increase the surcharge for employees without children from 0,6 to 0,7 percent is not yet final. Further details are expected to emerge in the coming weeks, and once a final proposal is drawn up, it will face a vote in the Bundestag.