German Social Insurance
The German system of
social insurance provides comprehensive protection from the
vicissitudes of life. It is based on what's called the principle of
solidarity.
This means that every insured person makes a
contribution towards financing social insurance depending on his
(financial) ability. Having said that, the benefits
are always the same for all insured persons.
Social insurance is based on five pillars:
Sozialversicherung = German social insurance
KV = Health insurance
RV = Pension insurance
AV = Unemployment insurance
UV = Accident insurance
PV = Long-term care insurance
Health insurance
Health insurance was the first type of social insurance to be established. For a start, a brief look at some facts.
Institution
The statutory health insurance companies.
Insured persons
Wage earners, pupils, students, pensioners, etc. (famiIy members with no income of their own, thus including pupils, are coinsured and exempt from making contributions)
Functions
Promotion of health, illness prevention and coverage of health risks.
Your health insurance
As an employee you are either compulsorily insured or a voluntary member. The difference lies in the level of
income and has no impact on the contribution amount. Employees whose salary regularly exceeds a specific threshold are no longer compulsorily insured, but become a voluntary member of the health insurance company or change to a private health insurance company. The employer is not required to withhold contributions for health insurance and long-term care insurance from voluntarily insured persons and pay them to the public health insurance company, but he normally does. If not, you are paid the employer's share of health insurance and long-term care insurance contributions
as a contribution allowance and must then pay the entire amount to the public health insurance company on your own (self-payer).
Family insurance - FamilienversicherungSpouses and children are insured at no extra cost, provided they have no or little income of their own. This applies to family members who live in Germany or in a country with which a health insurance treaty exists. There are varying age limits for children. If your family dependents should also be insured, just talk to the public health insurance about it.
Should your spouse hold employment in Germany he or she has also to be insured by the public health insurance.
Contribution amountContributions are always based on the amount of grass salary from employment. Other sources of income (renting, leasing or capital gains) are never taken into account. There is an upper limit on the obligation to contribute premiums, the "contribution assessment ceiling". Contributions are calculated only up to this amount. This applies to all insurance branches, however the thresholds are set at different levels.
Pension insurance
After the employee has retired from active working life pension insurance provides for a relatively secure retirement financially. However, a private pension plan is urgently recommended in addition to the state pension system in order to maintain a given standard of living during old age. Pensions are not just paid out during old age, but also in specific cases of reduced earning capacity or after the death of the family member who provided the family's source of income. Civil servants and some self-employed are exempt from statutory pension insurance.
Institution
German Pension Insurance (Federal, Miners, Railway, Sea, Regional).
Insured persons
The largest share of the population - employees, for example.
Functions
Benefits for rehabilitation, old age pension payments, pension for reduced earning capacity and surviving dependents' pension.
Financing
Contributions are calculated from gross salary and paid 50 percent each by employer and employee.
Unemployment insurance
To lesson the financial impact of losing a job, the shared risk community of employers and employees steps in. Among other things, unemployed persons with no income of their own receive unemployment benefits for a limited time.
Institution
Federal Labour Agency.
Insured persons
Employees.
Functions
Prevention of unemployment, payment of unemployment benefits, basic and advanced training, employment-creation measures, retraining, statistics, jobs service.
Financing
Contributions are calculated fram grass salary and paid 50 percent each by employer and employee.
Accident insurance
Accident insurance provides financial assistance for accidents that happen during work or occupational training. Furthermore, benefits are also granted for commuting accidents and occupational illnesses. This type of insurance is the only one to be financed completely by the employer.
Institution
Mainly employers liability insurance associations.
Insured persons
Employees, students, pupils, etc.
Functions
Accident prevention, restoration of health following occupational injuries, medical and occupational rehabilitation, injury compensation, death benefit, provision for dependents after occupational injuries.
Financing
Contributions from the companies.
Long-term care insurance
No matter if young or old: Anyone can become in need of long-term nursing care. When that happens care and nursing assistance has to be performed on a sustained basis, sometimes for decades. That costs a lot of money. An independent branch of social insurance was developed to cover the risk of requiring longterm nursing care, namely long-term care insurance. In order to keep administrative costs as low as possible the health insurance companies perform the tasks related to long-term care insurance.
Institution
The statutory long-term health care insurance companies (for the statutory health insurance companies).
Insured persons
All statutory insured persons. Entitlement to benefits exists only when a preinsuring time of five years in long-term care insurance has been met as a member or as a family dependent.
Functions
Joint assistance for long-term care patients, nursing allowance, nursing benefits.