Not everything that you spend random amounts on makes sense. Was your last shopping tour really necessary? Did you still need a new Sky subscription even though Netflix was just enough?
However, we do not actually have a choice on some of the things we spend on. For instance, let's think of the broadcasting contribution fees (Rundfunkbeitrag), which the German public has criticised for high fees for years. But if then World Cup matches are transmitted, the rebellion is limited.
A milestone in the history of German, on the other hand, are the social insurance schemes that Otto von Bismarck introduced successively back in 1883. And for these, we have to dig deeper into their pockets, which is in our favour.
Compulsory social insurance (verpflichtende Sozialversicherungen)
The compulsory social insurance in Germany includes:
- Health insurance (Krnkenversicherung)
- Accident insurance (Unfallversicherung)
- Pension Insurance (Rentenversicherung)
- Unemployment insurance (Arbeitslosenversicherung)
- Long-term care insurance (Pflegeversicherung)
The goal is to protect citizens from the consequences of adverse events. Sponsors usually are state institutions, public or private entities. No matter how high the income goes - there is a statutory social insurance obligation for everyone (gesetzliche Sozialversicherungspflicht). This is a solidarity compensation that, in turn, means that everyone can benefit from the system.
Health insurance covers illness, maternity, and accidents. It usually takes over the full costs, and sometimes they only participate. In Germany, there are two types of insurance: Private insurance and statutory insurance. With the statutory health insurance, the contribution payment is determined independently of age, gender, and health status. The amount of private health insurance contributions depends primarily on the individual health risk and age. Another disadvantage is that family members are not automatically insured.
Accident insurance (Unfallversicherung)
The consequences of an accident can be devastating. Accident insurance takes effect when a slightly or severe illness, and an accident occurs. It covers only own damage. Who is responsible or to blame for the accident, does not matter. As a rule, the insurance covers employment accidents and occupational illnesses.
The following are costs that are fully or partially taken over:
- Care benefit
- Disability pension
- Medical treatment
- Transitional allowance
- Retraining money
- Death benefit
Note: The Contributions to the accident insurance are 100 percent borne by employers.
Pension Insurance (Rentenversicherung)
In pension insurance, everyone is remunerated according to their payments in old age. However, the principle of solidarity (Solidarprinzip) does not always work 100%, especially with:
- Changes in contribution rates
- Changes in the pension value
- Crediting for child-raising periods
- Non-contributory periods
Pension insurance benefits both employers and employees. The pension entitlement exists when the statutory minimum period of insurance is fulfilled, and the insurance and personal conditions are satisfied.
The following services are covered:
- Old-age pension (Altersrente)
- Disability pension (Erwerbsminderungsrente)
- Widow's pension (Witwenrente)
- Orphan's pension (Waisenrente)
Note: The amount of the future pension depends on the amount of the contributions made in the course of an insurance life.
Long-term care insurance (Pflegeversicherung)
The long-term care insurance comes in when someone needs care and is dependent on another person’s assistance. In Germany, there are different levels of care (Pflegegrad), which also depends on the amount of financial support. Decisions for the classification in the long-term care insurance are made with substantial considerations or thoughts of the nursing reports.
All those who are either publicly or privately insured are entitled to it. With the introduction of the five levels of care, a more precise assessment procedure is to be ensured.
Note: Benefits are granted only on application and cannot be withdrawn retroactively.
Unemployment insurance (Arbeitslosenversicherung)
Only a few are employed for 40 years. If you lose your job, the unemployment insurance comes in. The employees pay half of the insurance and the employer the other half.
From unemployment insurance recipients receive:
- Career and job market advice
- Benefits for occupational integration
- Professional development services
- Benefits to remain in employment
- Unemployment benefits
- Partial unemployment benefit
- Insolvency benefit
- Training placement
- Employment agency
- Services for career choice
- Services for training choice
- Benefits for taking up gainful employment