Social Security System in Germany offers good coverage for various unforeseen situations and risks. We explain the main modules.
General Social Security System
All employees working in Germany obtain at the initial registration a social security number. The system covers the pension scheme, unemployment insurance, health insurance, and nursery care as well as work accident insurance.
While health insurance can be widely chosen and often employees may choose between various health care insurance providers and some have the right to choose between private and public insurance, unemployment, and pension scheme are governed by a central agency.
The fees are deducted automatically from the salary each month.
Every employee, school pupil, or student has the right to accident insurance. Employers cover the premium as part of the social security payments. In case an accident during the working hours or during the commuting time to and from work happens, the insurance kicks in. The home office rule is being adapted as we speak, as more and more employees work from home.
There is mandatory health insurance in Germany, so no one can opt it out. Employees earning above a certain limit (2020: 62,550€ p.a., 2021: 64,350€ p.a.) can choose to move to the private sector. This decision however needs to be thought through as only in certain situations a move back to the public system is allowed.
In general terms, all employees in Germany and citizens who are considered subject to tax can apply for a child benefit payable directly to the employee bank account.
From Jan. 1, 2021 for the 1st and 2nd child it is 219€ each, for the 3rd child 225€ and from 4th child 250€.
If you are unsure if you are eligible for a Child Benefit, contact us.