Index
The Federal Government and cabinet is made up of the Federal Chancellor and the Federal Ministers. While the Chancellor holds the power to issue directives, the ministers have departmental powers, meaning that they independently run their respective ministries in the framework of those directives. Moreover, the cabinet abides by the collegial principle, in disputes the Federal Government decides by majority. The affairs of state are managed by the Chancellor.
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 11.6 million foreigners live in Germany, or 13 percent of the population.
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.
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.
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.
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.