The German Health Ministry in Germany is reportedly considering changes in monthly contributions to care insurance. What does that mean for employers?
The proposed legislation suggests a 0.35 percent increase in contributions, effective from July 1st, 2023, while also introducing plans to provide enhanced financial assistance to individuals needing care.
What does this mean for employers?
With the Care Support and Relief Act (PUEG), two decisive changes in relation to the contribution to long-term care insurance are expected to be implemented on July 1, 2023.
On the one hand, the contribution rates for long-term care insurance are to be adjusted. The contribution rate to the social long-term care insurance should increase by 0.35 percentage points from 3.05 to 3.4 percent and the childless supplement by 0.25 percentage points from 0.35 to 0.6 percent increase. The legislator justifies this increase with a strengthening of home care associated with the aim of relieving everyone involved. In addition, the working conditions for the caregiver should be improved and the potential of digitization can be increasingly used.
On the other hand, the legislator would like to comply with the request of the Federal Constitutional Court to adjust the right to contributions by July 31, 2023. Because in an elite dated April 7, 2022, the court found that it was incompatible with the Basic Law for parents to be charged the same contributions to social long-term care insurance, regardless of the number of children they care for. According to the court, it is not constitutionally justified to treat something that is significantly unequal in the same way.
While increases in contributions in all branches of social security in recent years have become a commonplace practice in payroll accounting, the implementation of this judgment, in particular, represents the payroll facing new challenges. Because, where previously only parental status was available for employees the amount of the long-term care insurance contributions was decisive, the number and age of the children must now also be taken into account.
What changes does the legislator want to make and what do they look like?
In principle, it still applies that the total contribution for the statutory long-term care insurance for members. who have reached the age of 23 and have no children, consists of the regular contribution rate and the childless allowance (from July 1, 2023: 3.4% + 0.6% = 4.0%). This corresponds to an increase of a total of 0.6 percentage points (0.35 percentage points for social long-term care insurance and 0.25 percentage points
childless allowance).
For parents with one child, the regular contribution rate continues to apply (from July 1, 2023: 3.4% increase of 0.35 percentage points). This privileged contribution law for parents will also continue to be taken into account.
The innovations are therefore for parents with two or more children. Because, taking into account the judgment already mentioned above, the legislature has now decided that the contribution rate from the second and up to the fifth child will be reduced by a deduction of 0.25 percentage points per child for the time the children are raised (at the end of the month in which the respective child has reached the age of 25) is reduced. Thereafter, there is no deduction for the respective child, while for parents with two children, the contribution rate increases from 3.05% to 3.15% (previous 3.05% increase of 0.35 percentage points/deduction of 0.25 percentage points for one child), the contribution rate will drop in future for parents with at least three children (with three children to 2.90%). Parents whose children are all over the age of 25 pay the regular contribution rate (from July 1, 2023: 3.4%) from the day on which the youngest child turns 25. The legislator justifies this temporal contribution Limitation with the fact that the economic effort typically occurs and is greatest in the period of up to 25 years.
For better orientation of the future contribution rates, we have presented them in a table:
Family Status |
Total Contribution |
Employee Contribution |
Employer Contribution |
Parent with no child |
4.00% |
2.30% |
1.70% |
Parent with one child |
3.40% |
1.70% |
1.70% |
Parent with 2 children |
3.15% |
1.45% |
1.70% |
Parent with 3 children |
2.90% |
1.20% |
1.70% |
Parent with 4 children |
2.65% |
0.95% |
1.70% |
Parent with more than 5 children |
2.40% |
0.70% |
1.70% |
It is becoming clear that in the future employees will have to prove both of children to the employer and their age in order to benefit from the reduction in contributions.
What evidence is required?
The Central Association of Long-Term Care Insurance Funds will still make recommendations on the form of the evidence by July 1st, 2023, some of the previous recommendations will certainly remain in place (e.g. birth certificate, extract from the birth register of the registry office, adoption certificate), whereas on - whose evidence could possibly be omitted. Regardless of the form, the proof should be available within three months after the birth of the child.
The implementation of the judgment of the Federal Constitutional Court with this law should therefore lead to a constitutional consideration of contributions in the statutory long-term care insurance. However, it also means that additional employee data must be queried by the employer and stored in systems.
