The Health Ministry’s draft bill would raise the payroll‑tax rate for adults without children by 0.7 percentage points, aiming to shore up a strained long‑term‑care system as the population ages.
The Federal Health Ministry is preparing a bill that would make adults who have no children pay a larger share of Germany’s public long‑term‑care financing. According to a report by the RND news agency, the proposal would raise the contribution rate for childfree workers from the current 1.8 % of gross income to 2.5 % over a phased period, while their employers would continue to pay 1.8 %.
What the draft actually changes
- Contribution tiers – Workers with one child would keep the 1.8 % rate, those with two children would pay 1.55 %, and families with three or more children would pay 1.3 %.
- Scope – The rule would apply to all employees aged 23 and older who are employed full‑time. Part‑time workers and the self‑employed are not mentioned in the initial text.
- Timeline – The draft calls for a gradual increase of 0.7 % spread over several years. The exact schedule has not been disclosed.
Why the ministry sees a need for the change
Germany’s long‑term‑care system faces a demographic squeeze: the share of people aged 65 and over is projected to rise from about 22 % today to more than 30 % by 2050, while the birth rate remains well below replacement level. Public long‑term‑care insurance is funded mainly through payroll contributions, and the current rate of 1.8 % for most workers is not keeping pace with rising costs.
Potential impact on households
A worker earning €3,500 gross per month would see the monthly contribution rise from roughly €63 to €88 under the new rate – an extra €25 taken from the paycheck. For a dual‑income household where both partners are childfree, the additional burden could exceed €50 per month.
Political and social context
Health Minister Nina Warken, a member of Chancellor Friedrich Merz’s CDU, has not yet presented the draft to the cabinet. The proposal arrives amid a broader debate about how to finance elder care without overburdening younger generations, especially as immigration has softened but not reversed the population decline.
Critics argue that the measure penalises a personal lifestyle choice and could be seen as discriminatory. Proponents contend that those without children are less likely to receive direct benefits from the system and therefore should contribute more to its sustainability.
Limitations and open questions
- Legal challenges – German constitutional law protects equal treatment in taxation; a court could be asked to review whether the differentiated rates violate that principle.
- Coverage gaps – The draft does not address contributions from the self‑employed, freelancers, or the growing gig‑economy workforce, which together represent a sizable share of the labor market.
- Effectiveness – Even with the higher rate, the additional revenue may cover only a fraction of the projected shortfall in long‑term‑care financing. Complementary reforms, such as adjusting benefit levels or expanding private insurance options, might still be required.
For the full text of the report, see the original DW article here.
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