Strong Welfare State

Germany’s welfare system is one of the most comprehensive in the world. As in other developed democracies, spending on the welfare state Welfare state The principle of the welfare state is enshrined in Article 20 of the Basic Law and cannot be rescinded, even if the Basic Law is changed.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… Read more › represents the largest individual item of public spending. Expenditure on the welfare state amounted to around 1.19 trillion euros in 2020, equivalent to 33.6% of GDP.

The tradition of the state welfare system goes back to the age of industrialisation in Germany in the second half of the 19th Century and is associated with the then Reich Chancellor, Otto von Bismarck. It was under his chancellorship that mandatory health insurance 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… Read more › was first introduced in 1883. Over the following years, legislation was expanded that would form the basic principles of the welfare state. The Basic Law The Basic Law The Basic Law determines that Germany is a constitutional state: All state authorities are subject to judicial control. Section 1 of the Basic Law is of particular relevance. It stipulates that respect for human dignity is the most important aspect of the constitution: “Human dignity shall be… Read more › further enshrines the principle of the welfare state for the Federal Republic of Germany. According to the Basic Law The Basic Law The Basic Law determines that Germany is a constitutional state: All state authorities are subject to judicial control. Section 1 of the Basic Law is of particular relevance. It stipulates that respect for human dignity is the most important aspect of the constitution: “Human dignity shall be… Read more › , political leaders and society must continually negotiate and update the form that the welfare state takes. Demographic change is makes assimilation necessary.

Various forms of basic insurance for health, pensions, accidents, nursing care and unemployment provide a tightly-woven network protecting members of the public against threats to critical aspects of their lives. The network of welfare support includes a basic income for pensioners and those permanently unable to work, along with tax benefits such as the family allowance. Families receive child benefit payments each month. The Federal Government Federal Government 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… Read more › ’s coalition agreement also includes a commitment to enshrine children’s rights in the Basic Law The Basic Law The Basic Law determines that Germany is a constitutional state: All state authorities are subject to judicial control. Section 1 of the Basic Law is of particular relevance. It stipulates that respect for human dignity is the most important aspect of the constitution: “Human dignity shall be… Read more › .

The pension package that entered into force in 2014 especially improves the situation of elderly people. The reform saw the introduction, among other things, of the full pension from 63 years of age and the so-called “mother’s pension”, which acknowledges mothers’ work in raising children. Women who brought up children born before 1992 were not able to access the childcare support available to parents today, which reduced their opportunities in the world of work. The mother’s pension acknowledges the work they did in bringing up children. Since 2014, around 9.5 million women (and a small number of men) have had their pensions increased by over 300 euros a year. From 1 July 2014 onwards, people covered by the pension insurance 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… Read more › scheme who have paid in for 45 years are able to retire at 63 without deductions to their pension.

A basic pension scheme was introduced in early 2021. Anyone who has paid into the pension insurance 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… Read more › scheme for at least 33 years will receive a bonus. The basic pension will benefit around 1.3 million people, many of them women. 

Health insurance 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… Read more › cover is a legal requirement in Germany. Medical care is provided through a wide range of services including hospitals, medical practices and rehabilitation clinics.