As of: February 29, 2024, 11:35 a.m
By: Lisa Mayerhofer
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Social security contributions in Germany are always the subject of heated debate.
(Archive image) © Stefan Sauer
Germany's social system is at a tipping point, economists warn in a new study.
The massive increase in social security contributions could lead to the younger generation leaving Germany.
Munich – Social security contributions in Germany are always the subject of heated debate.
Now a new study commissioned by family businesses and young companies suggests that social security contributions will rise massively if no fundamental reforms are adopted.
Study warns: Welfare state will soon no longer be affordable without reforms
Accordingly, the total contribution rate for pension, health, nursing care and unemployment insurance could rise from the current around 40.9 percent to more than 50 percent by 2050 if nothing is done.
The problem: The tipping point will already be reached in 20230, according to the experts Prof. Dr.
Christian Hagist and Prof. Dr.
Stefan Fetzer.
From this point on, the welfare state as we currently know it will be neither financeable nor reformable.
The problem: The pay-as-you-go system in the healthcare system and the pension system: For example, those who are now employed pay the pensions of the elderly.
However, due to demographic change, the number of employed people is falling compared to the number of retirees, so more and more people are receiving money while less and less is being paid in.
At the same time, the aging of the population is driving up healthcare costs.
As a result, economists fear that contribution rates will rise so much that the young generation will unilaterally terminate the generational contract - either by emigrating or switching to undeclared work.
They are calling for quick reforms and are proposing, among other things, linking the retirement age to life expectancy and reintroducing a practice fee.
Business association calls for quick reforms
Thomas Hoppe, Federal Chairman of the Young Entrepreneurs Business Association, warns in a statement: “The federal government must introduce necessary reforms in all three insurance sectors during this legislative period.
Otherwise, the young generation will unilaterally say goodbye to the intergenerational contract if social contributions only rise above 50 percent.”
As a result, social security for today's baby boomer generation will no longer be affordable and its collapse will primarily affect the weak, said Hoppe.
“If the federal government ignores this need for reform, it is already sawing away at the branch on whose strength tens of millions of insured people in Germany rely.”