Germany wants childless adults to pay more for ageing
Germany confronts aged care funding pressures
- Higher payments proposed: Childless adults could pay more into Germany’s care system
- System under pressure: Germany faces a projected €22 billion aged care funding shortfall
- Population ageing: Germans aged over 67 are expected to reach 21.5 million by 2040
- Criticism growing: Trade unions say the proposal unfairly targets childless workers
Australia is not the only country grappling with who pays for ageing.
Germany is now preparing to increase long-term care contributions for adults without children as it confronts mounting financial pressure inside its aged care system.
Under draft reforms being developed by German Health Minister Nina Warken, childless adults over the age of 23 would pay higher contributions into the country’s compulsory long-term care insurance scheme.
The proposal would gradually lift the surcharge paid by childless workers by 0.1 percentage points to 0.7%, taking their total contribution rate to 4.3% of income. However, contribution rates for people with children would remain lower: 3.6% for people with one child, 3.35% for people with two children, and 3.1% for people with three or more children.
Germany’s long-term care insurance system, introduced in 1995, operates as a compulsory social insurance scheme covering both home care and residential aged care. Contributions are shared between employers and employees – employers pay 1.8% – while the system only partially covers care costs.
Now, the system is under strain.
Minister Warken reportedly expects Germany’s long-term care insurance system to face a deficit of more than €22 billion (AUD$36 billion) over the next two years.
German Government projections also show the number of people aged over 67 is expected to rise to almost 21.5 million by 2040, increasing demand for care services.
But the proposal has already sparked backlash.
Germany’s Trade Union Confederation criticised the reforms, arguing “punishing childless people” would not solve the fundamental problems facing long-term care insurance.
But as in Australia, fewer younger workers are supporting a growing older population, leaving Governments to confront the question: who foots the bill?
