Home > Care reform creates major financial and bureaucratic burdens for employers – readjustments urgently needed

Care reform creates major financial and bureaucratic burdens for employers - readjustments urgently needed

BDA AGENDA 10/23 | Topic of the week | May 17, 2023

By increasing the contribution rate and implementing the differentiation of contributions according to the number of children without a prior digital check, politicians are creating high financial and bureaucratic burdens for employers and failing to implement the promised moratorium on burdens. Especially in times of multiple crises and high price increases, everything must be done to prevent additional burdens in the interests of the economy and citizens.

The parliamentary procedure for the Care Support and Relief Act (PUEG) urgently needs to be adjusted.

Instead of ensuring the long-term financial viability of long-term care insurance through sustainable structural reforms, the draft PUEG provides for a massive increase in contributions to social long-term care insurance. In fact, according to the draft, contributions are to be increased by €6.6 billion per year from 2024, which corresponds to an increase in the contribution burden of over 10%. Such an increase in contributions is by no means "moderate", as agreed in the coalition agreement, especially as contributions to long-term care insurance are currently rising by around 5% per year anyway due to the increase in the contribution assessment base as a result of higher wages, salaries and pensions. This places a heavy financial burden on employers and the majority of insured persons. The increase in long-term care insurance contributions means that the 40% target for stable social insurance contributions is moving further and further away. In times of high cost burdens and multiple crises, this is unacceptable for those paying contributions.

In addition to this planned massive financial burden on those paying contributions, the additional bureaucratic burden for companies when implementing the reform is unacceptable. The planned child-dependent contribution level in the form envisaged in the draft cannot be implemented within the planned timeframe, neither for employers nor for other bodies that pay contributions, such as the pension insurance fund. This is due to the fact that employers and other bodies paying contributions usually do not have the necessary information on the number and age of children, as both the number of children and their age are usually irrelevant for the processing of the employment relationship. This information can only be obtained at considerable expense in terms of time and money, which cannot be guaranteed until the planned entry into force on July 1, 2023. The law may only enter into force once the retrieval of parental status can be made available to all contribution-paying bodies via a functioning central office. The differentiation of contributions may only take effect once this is functioning - not before and not retroactively.

The federal government must remember its promised moratorium on burdens and stick to it.

Click here for the BDA statement on the draft law on support and relief in care (PUEG)