Accident insurance

Statutory accident insurance is a liability insurance on the part of employers in favor of employees who are thereby protected from the consequences of an accident at work or an occupational disease.

Cross-generational contract

This is the name of the system used to finance statutory pension insurance: employees today pay proportional contributions toward the pensions of the generation of retirees in the expectation that the coming generation will then pay for their pensions. The first mandatory regulations on old-age security were made as long ago as 1889. Alongside contributions by the employers and employees, today the system is also funded by government subsidies. Since 2002, statutory pensions have been supplemented by state-supported, private capital-backed old-age provisions. In addition to the state pension for employees, other forms of pensions and insurances secure old age provisions for civil servants and the self-employed.

Equal rights

In Germany, equal rights are enshrined in the Basic Law, it is legally impermissible to discrim­inate by gender as regards working conditions and pay, and there are numerous laws guaranteeing the rights of women. Moreover, Germany is firmly committed to equal rights for both genders – relying on a wide- ranging network of state and private institutions in this regard. With the introduction of gender mainstreaming, women’s politics has been integrated as a cross- disciplinary function into all government and local departments and agencies. Thus, the state is proactively advancing the creation of equal conditions for men and women. These measures are being successful: Germany places 9th best world-wide in the UN’s GEM Index which measures women’s participation in business and politics.

Health insurance

Almost all citizens in Germany have health insurance, whether as a compulsory member of the statutory health insurance scheme (90 percent) or a private health insurance scheme (10 percent). The health insurance companies cover the cost of medical treatment, medication, hospitalization and preventive health care. Contributions to the health insurance scheme are made by employees and employers. Non-employed family members of those in a compulsory health insurance scheme do not pay any contributions.


As early as the 19th century Germany attracted a large number of immigrants and since the 1950s has emerged as the European country with the largest immigrant population. In 1950, there were about 500,000 foreigners in Germany, accounting for a mere one percent or so of the population. This has changed emphatically: Today, some 10 million foreigners live in Germany, or 12 percent of the population.

Life expectancy

While the average life expectancy in the early 20th century was about 46, a boy in Germany born today can expect to reach the age of 78 and a girl as much as 83.

Long-term care insurance

Long-term care insurance was introduced in 1995 as the “fifth pillar” of the social insurance system. The compulsory insurance is financed by equal contributions by employers and employees.


Under certain circumstances migrants living in Germany on a permanent basis can apply for German citizenship. In 2016 110,400 foreigners were naturalized.

Pension insurance

The statutory pension insurance is the most important pillar of old-age provisions. Its financing is split: The monthly contributions paid by employees and employers pay the pensions of those currently in retirement. Through their contributions, those insured acquire some rights when they themselves become pensioners. In turn, coming generations provide for these future rents with their contributions (cross-generational contract). In addition, company and private pensions are the second and third pillars of provisions for old age. Under certain conditions these also enjoy government support.

Senior citizens

Senior citizens are not only growing older, but are healthier, fitter and more active than in the past. They are also economically better off: the over-60s hold almost a third of total purchasing power. The life style of the 50+ generation: almost one in two cares increasingly about fitness, health, and well-being. As such, physical activities and sport are becoming more and more important: Every third person over 60 does sport almost every day.

Social assistance

Another feature of the social lifeline is social assistance, which is financed through taxes. It comes into effect when people are unable to escape their plight on their own and by their own means or by those of relatives. As such, there is basic protection in old age or in the case of long-term unemployment as well as state help towards living or to assist persons in certain predicaments

Standard of living

Germany is one of the countries with the highest standard of living in the world. According to the UN’s HDI Index, Germany is one of the most developed countries in the world in terms of life expectancy, degree of literacy and per-capita income. The healthcare system enables comprehensive medical care, whereby the social security systems of the statutory health insurances, care and accident insurance and unemployment support protect people against existential risks.

Unemployment insurance

In Germany those with no work can claim support. Anyone who is unemployed and over the past two years has paid contributions to the state unemployment insurance system for at least 12 months is entitled to unemployment benefit (60 to 67 percent of their last net income). This unemployment benefit is financed through the contributions of which employers and employees each pay half. The longest period for which unemployment benefit can be drawn is between six and 24 months. After that period those looking for work can apply for basic support (known as “unemployment benefit II”), which is assessed according to the applicant’s needs. In the economic crisis the system of short-time work payment financed from tax revenue proved its worth. It enabled companies to avoid redundancies in a difficult economic situation.

Welfare state

The principle of the welfare state is enshrined in Article 20 of the Basic Law and cannot be rescinded, even if the Basic Law is changed. In this way the Basic Law commits the state to protect, in addition to their freedom, the natural bases of life of its citizens. Each individual, however, also has to assume responsibility for his own social welfare.