Insurance and social security are among the most important topics for those who plan or wish to settle and work long-term in Germany.

Germany is famous for its extremely good social security system, one of the best in the world, along with a high insurance premium. This is a big difference compared to the United States, a country where many Vietnamese people wish to settle down and work long-term.

In this short article, let’s try to learn a little about the story of insurance and social security in the Federal Republic of Germany!

Social security and insurances in Germany

Social insurance contribution level in Germany

The first problem is where is the money?

First, let’s review the social insurance contribution levels of the Federal Republic of Germany.

Here is a table of detailed social insurance contribution data in Germany in 2021:

Insurance type	Total %	Closed businesses (%)	Individual contribution (%)
Health Insurance/Medical Insurance Deductible: Health insurance (KV) reduced contribution rate	14,0	7,0	7,0
Average additional contribution (determined by the federal health department) Average additional contribution rate (determined by the Federal Ministry of Health)	1,3
Pension insurance Pension insurance (RV)	18,6	9,3	9,3
Unemployment insurance Unemployment insurance (AV)	2,4	1,2	1,2
Care insurance Nursing care insurance (PV)	3,05	1,525	1,525
Additional contribution for PV if over 23 years old and childless  PV surcharge for childless members aged 23 and over	3,30	1,525	1,775

In general, compulsory social insurance contributions are about 40% of each employee’s pre-tax income, with the employee paying half and the business paying the remaining half.

In short, each person’s pre-tax (brutto) income will have about 20% deducted for social insurance payments.

Social security conditions that workers enjoy

Although the social insurance premium is quite high, in return what workers receive is very commensurate, if not “very good, very profitable” compared to the part they pay.

Specifically:

Health insurance

If you get sick, you won’t have to worry too much about medical expenses while in Germany.

Health insurance pays for all emergency medical treatment .

The basic coverage of statutory health insurance companies extends to the following benefits:

• Outpatient medical treatment, such as at a doctor’s office
• Teeth care
• Medicines and remedies or aids
• Inpatient treatment and stay, for example in hospital
• Medically Necessary Rehabilitation Measures
• Benefits for pregnant women and during childbirth

By the way: if you buy health insurance, you are automatically covered by long-term care insurance.

For example, will long-term care insurance kick in if you can no longer care for yourself due to a serious illness? that is, need help from a caregiver.

In short, when going to the hospital, except for the costs of VIP services such as 5-star luxury rooms, beautiful nurses, helicopters, etc., the normal treatment costs from examination, medicine, surgery, etc. are all covered by health insurance, you don’t have to worry about getting sick and holding a hospital bill and then having a heart attack because of a debt of millions of EUR like in the US.

Care insurance

Is a supplementary branch of health insurance. It covers expenses incurred in the event of a serious illness or accident that requires long-term care by a nurse, paramedic, or special caregiver.

Pension insurance

Like in Vietnam and other countries, it pays pensions to employees after they retire.

The amount of your pension is mainly based on your income and the number of years you have worked in Germany.

Accident insurance

If you fall ill because of your work or have an accident, statutory accident insurance will cover the costs of medical treatment and care.

Then it will even bear the cost of continuing to pay you.

It also pays for new training (retraining) if you are no longer able to work in your occupation.

And it pays benefits to widows and orphans.

Your company will be required to pay contributions towards this insurance, by law.

Note that in some cases, measuring blood alcohol concentration at the time of an accident can affect the amount of payment and determine fault for the accident.

So it is best to only drink alcohol at home, and absolutely do not drive or operate machinery after drinking.

Unemployment insurance

Basically, the following conditions apply to receive unemployment benefits:

• You have completed the qualifying period. This usually means: You have worked for mandatory insurance for at least 12 months in the 30 months before you applied for unemployment. Several jobs can be added together.
• You have registered for unemployment with your employment agency.
• You are unemployed, but you can work with mandatory insurance (at least 15 hours per week).
• You are looking for a job that requires compulsory insurance and you are working with the Employment Agency.

How much unemployment benefits do you get?

Here’s how unemployment benefits are calculated (simplified):

• The basis for calculation is your total salary (wages) for the past 12 months. This amount is divided by the number of days in the year, i.e. 365. The result is your total daily salary.
• Payroll taxes, solidarity surcharges and a 20 percent social security allowance are deducted from this amount. (These deductions are only used for calculation purposes and are not actually paid.) The result is your net daily wage.
• 60 percent of this net income is the amount you receive as unemployment benefits each day. It increases to 67 percent if you or your spouse/partner have one or more children.

How long will you receive unemployment benefits?

How long you receive unemployment benefits depends on two factors:

1. How long have you been covered by compulsory insurance, for example in the form of compulsory employment, and
2. How old are you.

The compulsory insurance participation period must usually be within the last 5 years. It is possible to accumulate some periods of compulsory insurance.

• Unemployment benefit period up to 50 years old
  If you are under 50 years old, you are entitled to a maximum of 12 months of unemployment benefits, provided that you have previously participated in compulsory insurance for 24 months or more.

Another example: If you have paid insurance for at least 12 months, you can receive unemployment benefits for up to 6 months.

• Unemployment benefit period for people aged 50 and over
  From age 50, the benefit period increases in several steps up to 24 months. This maximum benefit period applies to unemployed people aged 58 and over. Prerequisite: You must have been insured for 48 months or more.
• Temporary Employment Benefit Duration
  If you meet the requirements for a shorter eligibility period, the following applies: For example, if you have 8 months of mandatory coverage, you can receive unemployment benefits for up to 4 months.

Security for parenting, security for children

In general, the Federal Republic of Germany strongly encourages legal workers to give birth, to create a new labor force for the country.

They also pay great attention and support to the best of their ability in the care and education of children.

Government support for initial childcare:

• Child benefit:

  • Is a monthly cash support package for parents.
  • Condition:
    • Your children under 18 years of age (under certain conditions, you can also apply for and receive child benefit for children of legal age),
    • You care for your children regularly and they live in your household (this also applies to stepchildren, grandchildren or adopted children) and
    • You live in Germany, another EU country, Norway, Liechtenstein, Iceland or Switzerland. You can find out more on the Child rights for people abroad page.
  • Support level:

As a rule, you will receive at least 219 euros  per month in child benefit for each child, until they turn 18.

If you have multiple children, their number determines the total amount of child support you will receive.

This also applies if one of the children does not live with you: From the third child onwards, you are entitled to more child benefits ? even if their siblings live with the other parent.

Child benefit from 1 January 2021
First child: 219 euros
Second child: 219 euros
Third child: 225 euros
From the 4th child: 250 euros

• Your wife and children are entitled to free social security benefits like you , even if you are the only one paying for these benefits (if your wife is too busy taking care of the children to work).
• Free universal education from kindergarten to university at public kindergartens, primary schools, secondary schools, specialized schools, colleges and universities
• Students studying at universities/colleges in Germany who are in difficult circumstances can apply for government support for living expenses/ BAföG credit, with a maximum monthly support of 861 EUR, from the time they enter university until they graduate or turn 28. (Note, the condition for receiving this support package is that their parents are working and paying taxes to the Federal Republic of Germany, so 96.69% of Vietnamese students studying in Germany are not eligible to apply for this, unless your father or mother is already in the Federal Republic of Germany and has been working and paying taxes for a long time)

For more information on taxes in Germany: