Germany has a well-developed social security system. If you work in Germany and are subject to social security contributions, you will usually be a member of the following five statutory social security organisations:
- The statutory health insurance fund pays the costs of visits to the doctor, and for medication and therapy.
- The statutory long-term care insurance fund offers basic insurance for the eventuality of your being dependent on long-term care owing to illness. This usually applies to people in old age.
- The statutory pension insurance fund pays employees a pension once they have retired. Basically, the amount of pension you receive depends first and foremost on your income and the number of years you have worked in Germany.
- Statutory accident insurance covers the costs of medical treatment and occupational rehabilitation after an accident at work or in the case of an occupational illness.
- The statutory unemployment insurance fund provides the unemployed with income for a certain period of time if, as a general rule, they have been insured for at least one year during the last two years and are searching for a new job. In addition, the Federal Employment Agency (BA) supports job-seekers by providing advice and acting as an intermediary for offers of employment.
What social security costs
A fixed percentage of your work income goes to pay your membership of these social security funds. Your employer also pays a fixed proportion. For example: membership of the statutory health insurance fund currently costs 14.6% of your work income – you pay 7.3% of this and your employer 7.3%. You do not have to do anything to transfer the money. Your employer pays the contributions for all five types of social security directly to the insurance funds.
A special case: health insurance
As an employee, you are automatically a member of the pension, long-term care, accident and unemployment insurance funds. There is only one provider of each of these types of insurance. Health insurance is a special case. A large number of insurance companies exist and as a statutory insurance payer, you can choose the health insurance fund which you feel offers the best services. The general rate of contributions is the same whichever health fund you choose. However, some funds require an additional contribution, which is paid by the workers and employers equally. The average additional contribution was 1% in 2018. When you have chosen your health insurance fund, notify your employer. The employer will then register you with that fund.
Health insurance is a special case in another way too: if your annual income exceeds a certain amount, you do not have to be a member of a statutory insurance fund. You are obliged to be insured, but you can join a private health insurance fund. In 2019, this is the case if your gross annual income exceeds 60,750 euros. As it may be complicated to change back from a private health fund to a statutory fund, you should consider this step carefully.
The social security card
As an employee, you will receive a social security card with a social security number on it. Give this number to your employer. Keep your social security card safe as you will need the number frequently. If you lose your social security card, you can ask the German state pension fund (Rentensversicherung) for a replacement.
German State Insurance Fund