Keeping social insurance efficient and financially viable
The contribution rate for social security must remain below 40% in the future. For this reason, social security benefits must not be allowed to rise at a permanently higher rate than economic strength. Otherwise, massive risks will arise for international competitiveness and economic development at home. This would have unfavorable effects on employment and would also jeopardize social cohesion and a fair balance between the generations involved.
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In February 2019, the Confederation of German Employers' Associations set up a commission on the future of social insurance. Under the leadership of Professor Dr. Werding (Ruhr University Bochum), it has drawn up proposals on how the total social insurance contribution rates can be kept below 40% in the long term.The
Social benefits rise faster than economic strength
Total social security contributionAccording to Section 28d of the German Social Security Code (SGB IV), the total social security contribution includes all contributions to the social security branches financed jointly by employees and employers, i.e. pension, health, unemployment and long-term care insurance. The special contribution to statutory health insurance (1.3%) and the supplementary contribution for childless persons to social long-term care insurance introduced on January 1, 2005 (0.25% and 0.07% respectively on average for all members) are thus also included in the total social insurance contribution.
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Facts and figures
Employers contribute the most to financing the German welfare state:
According to the German government's social budget, the employers' share of financing for all social benefits was 34.8%, higher than that of the state (32.8%) and higher than the social contributions of the insured (30.9%). Employers thus already bear the highest cost burden.