The German social benefit system

The German social benefit system is following the idea of solidarity. The economic system itself is described to be a social market economy “Soziale Marktwirtscaft.”

So, people in Germany working hard contribute for the whole society and take care of themselves if they get sick or can’t work for some time making the minimum living standard is still possible. In addition to the taxation system of Germany, every employee pays health insurance and an income tax. Also, each employee pays an insurance in case he or she has to face unemployment: The unemployment insurance, called Arbeitslosengeld I.  Paying taxes and obligated insurances gives you some advantages that you could not find in other countries: health care, maternity and child benefits, parenting time, unemployment benefits, retirement and accident insurance, or nursing care insurance.

Anyone who is in a paid position must pay contributions to the legal unemployment fund- its mandatory. On your german paycheck, you can read all the details like how much of your gross income is being taken automatically for the social insurances and how much also your employer is paying. Employers are obligated as well to pay your health insurance partly.

Because of this, social risks like homelessness can be reduced.

Citizens of the EU and the United States with social insurance and retirement contract can be recognized or transferred to Germany from their country of origin.

The insurance for unemployment can be granted for maximum a year – if you worked without interruption for 24 months. If you worked in a job for at least 12 Month, you have the right to benefit from the insurance (Arbeitslosengeld I) for six months. The amount is about 60% of your average last year of net income.

When this first insurance-based benefit system expires, you can ask for the second law of unemployment benefits that is called Arbeitslosengeld II or informal “Hartz 4”. For this kind of social benefit, you don’t have to have worked before at all if you are a German citizen. It’s not an insurance-based benefit. The focus is to support you looking for a job and leave the social benefits system as soon as possible.

If you just quit your job yourself, you don’t have the right to get unemployment benefit from the unemployment insurance for the first three months. In Germany, the worst thing you can do concerning unemployment is quitting your job. The best is to get fired. Many people make informal agreements with their bosses to get fired because of this. Depends on how much you earned but for a former high-income employee, 60% of the last net income is better than the 416€ (in 2018) monthly amount from the second benefit system. However, for this one you can register, if you got the first three-month “punishment” in the insurance-based system (ALG I).

For people from EU states, that are not German citizens the law has been so far that they can’t receive unemployment benefits in the first five years. However, there is a possibility to apply for some benefits after the first three months of residence. Usually, they won’t be granted. The government wants to secure that the EU immigration ads to the labor market and to avoid social welfare immigration, that is causing more costs to the welfare system. The agreement follows the Freedom of Movement Law in the EU.

If you are not able to work out of health reasons, you are protected as a member of the community’s safety plan and you are entitled to the same amount of financial support as paid under the Unemployment Benefit II from the Jobcenter ( ALG II ). However, what is essential: It comes from a different governmental regulation- the Sozialamt (Social welfare office), and they don’t pay unemployment money, they pay social money “Sozialgeld.

You need to prove your health issues. These can lead to some frustrations but remember that you are asking for a social benefit based on the idea of solidarity. So the taxpayers also have to trust some amount the government that the taxes are spent as the law requires. Errors can, unfortunately, occur in all governments in the world.

The social benefit of both kinds – the unemployment benefit and the social benefit is only payable to a person who cannot provide for their living or their family members. As income is considered any financial income achieved through employment or self-employment, also social or unemployment benefits instead of earning a living – such as ill-treatment payments, capital or interest gains, rental or leasing revenue, service benefits, childcare, retirement, and capital earnings.

Also, you can apply for unemployment benefits even when you and your partner have incomes, but it might be not enough to reach the minimum expected family income that is provided for families with one child or more children.

Author: Dorina Rendic

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