The German social insurance system plays the central role in the protection against social risks in Germany. Based on the principle of solidarity – i.e. contributions by many that an individual may benefit from in an emergency – it provides financial protection against the risks encountered in life and their consequences, such as sickness, unemployment, old age, occupational accidents, and the need for long-term care. Employees are subject to compulsory insurance in Germany as long as they fall below a certain income level (social security contribution ceiling or contribution assessment ceiling). Self-employed artists and publicists are also subject to social insurance in line with the Artists‘ Social Security Act (KSVG) (German only!) (see Artists' Social Security Fund). The social security fund is financed by contributions from both employers and employees.
Social insurance in Germany is divided into five areas:
- Health insurance § 5 SGB V (German only!)
Health insurance is mandatory in Germany. If one’s monthly income exceeds the compulsory contribution limit, one may choose to acquire private health insurance.
- Long-term care insurance §§ 20 f. SGB XI (German only!)
Long-term care insurance in Germany is required by law and linked to health insurance.
- Accident insurance § 2 SGB VII (German only!)
All employees are covered by the statutory accident insurance, which covers benefits in the case of accidents that occur at work or on the way to and from work.
- Pension insurance §§ 1 f. SGB VI (German only!)
The statutory pension insurance in Germany is compulsory for self-employed artists and publicists in Germany who are insured through the Artists’ Social Security Fund as well as all employees.
- Unemployment insurance § 25 ff. SGB III (German only!)
Unemployment insurance is a compulsory insurance and covers all persons who engage in paid employment that do not meet the requirements of marginal employment.
The Artists’ Social Security Fund (KSK) does not insure self-employed artists and publicists against accidents and unemployment (see Artists' Social Security Fund).
The broschure Social Security at a Glance 2020 of the Federal Ministry of Labour and Social Affairs provides detailed information on the social security system in Germany.