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The German social insurance system

Germany's system of social insurance is rooted in its laws as a nation. It is designed to protect German citizens from the financial effects of unemployment, advancing age, illness, and other potential risks to their livelihood. The five types of insurance described below constitute part of the German social insurance system, which means that everyone who lives here must have them.

Health insurance

Statutory health insurance covers the cost of doctor's visits and many types of medication and therapy.

Long-term care insurance

Statutory long-term care insurance provides basic protection should you become ill and require care for an extended period of time. In most cases, this applies to people of advanced age.

Accident insurance

Statutory accident insurance covers the costs of medical treatment and occupational reintegration following a work-related accident or illness.

Retirement insurance

Germany's statutory retirement insurance fund provides pensions to people who have retired from professional life. The pension each person receives is based roughly on his or her previous income and the number of years he or she worked in the country.

Unemployment insurance

Statutory unemployment insurance provides an income for a set period of time to those who are currently out of work, but have had unemployment insurance for at least one consecutive year over the past two years (in most cases) and are actively seeking employment. Meanwhile, Germany's Federal Employment Agency also provides advice and placement services to those looking for a new job.

All employees in Germany are required to have these forms of statutory social insurance. Employers pay one half of the corresponding contributions, while the other half is covered by employees themselves. Since the appropriate amounts will be automatically deducted from your salary, no action is necessary on your part. While the social insurance contributions you pay are generally based on your income, those required for health and retirement insurance are capped at a certain income threshold. 

Exceptions

There are two exceptions: In the case of health insurance, employees pay a slightly greater share than their employers. On the other hand, employers cover the full cost of accident insurance.

Your contributions entitle you to benefits in the various areas covered by statutory social insurance. 

It is important to note that employees who are sent to Germany from another EU nation by their employers are required to document the aspects of their employment in Germany that are relevant to the country's social insurance laws using form A 1 (also known as an EU posting certificate). With these certificates, which are issued by the foreign social insurance institutions responsible, employees dispatched to other countries can prove that they are subject to the social insurance laws of their home country and not those observed in Germany. 

Social insurance number

Your employer will take care of your registration with the social insurance authorities. You will then receive a letter from the statutory retirement insurance fund containing your social insurance number. Be sure to keep it in a safe place, as you will be required to present it for a variety of purposes.