German social security system
Social security
The German social security system is broken down into four main and a
number of minor elements. The main components are retirement insurance,
unemployment insurance, invalidity insurance, and health insurance.
In 2014, the monthly premiums are 18.9%, 3.0%, 2.05% and 15.5% of gross salary.
Basically, the cost is split equally between employer and employee, although
childless employees are required to bear an additional 0.25% premium for the
invalidity insurance.
The health insurance premium is another departure from
the principle of equal split of the burden: the employee contribution is 8.2% and
that of the employer 7.3%. The total of these contributions amounts to 39.45%
of an employee’s gross salary (39.7% if the employee is childless), although the
contributions are only due on salaries up to a certain level. In 2014, the monthly
levels are €5,950 (€5,000 in the east) for contributions to the retirement and
unemployment insurance, and €4,050 (throughout Germany) for premiums to
the invalidity and health insurance.
With certain specific exceptions, the first
two of these insurances are compulsory; the health and invalidity insurance are
voluntary for those with annual earnings of more than €53,550. However, those
opting out must take out private health insurance.
They are also generally
unable to rejoin the state scheme later, unless their regular monthly earnings
fall below the opt-out level while they are still under 55.
EU Forecast
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