Burden from the extended pension for mother
The financial burden from the extended pension for mother with more than 3
children born before 1992 is already clear, namely EUR 3.4 bn p.a. (in 2019).
The new supplementary (minimum) pension for low-wage earner who have
contributed to the scheme for at least 35 years will cost only EUR 0.1 bn initially.
In contrast to the shrinking costs of the additional benefits for elderly mothers,
the costs of the latter measure will increase substantially over time. For the time
being the bulk of the additional expenditure will primarily be financed from the
scheme’s reserves, thus preventing possible further reduction of the contribution
rate.
Employers shall pay higher contributions to the public health insurance (so that
they would have to pay the same contributions as the employees). While this will
reduce the employees‘ payroll tax (by EUR about 7 bn, as of 2018) it will burden
the employers and the public pension scheme (contributions for pensioners)
with about EUR 5.6 bn and EUR 1.3 bn. Respectively.
Employees as well as employers will obviously welcome the reduction of the
contribution to the public unemployment insurance from 3% to 2.7% which will
reduce the payroll tax burden for each of the two groups by about EUR 0.7 bn
p.a. This lends – at least in the short term – some credence to the Groko’s
stipulation to keep the total rate of contributions to all social insurance schemes
(at present 39.75%) below the 40% threshold.
While under present economic
conditions it will be easy to fulfil this declaration it will be a challenge in case of
slower growth and/or more unfavourable demographic conditions, i.e. In the next
terms.
EU Forecast
euf:ba18.d:150/nws-01