Germany is poised to adjust its social contribution system, impacting higher earners, according to a draft ordinance from the Federal Ministry of Labour and Social Affairs, as reported by “Politico” The proposed changes, currently under consideration within the federal government, involve increases to contribution assessment ceilings for statutory pension, health and long-term care insurance, as well as the insurance obligation limit
The draft outlines a rise in the contribution assessment ceiling for statutory pensions to €8,450 in 2026, an increase from the current €8,050 This means individuals with higher incomes will contribute a larger portion of their earnings towards pension funding, while concurrently increasing their future entitlement to benefits
Similar adjustments are planned for statutory health and long-term care insurance The current contribution assessment ceiling of €5,51250 is projected to rise to €5,81250 in 2026
The ordinance also proposes an increase in the insurance obligation limit Individuals earning above this threshold are eligible to opt for private health insurance For 2026, the limit is set at €6,450, up from the current €6,150
These adjustments are based on a fixed formula linked to wage growth in the preceding year, as stipulated in the Ministry’s ordinance According to the draft, gross wages and salaries in Germany increased by 516 percent in 2024, driving the proposed changes The Ministry emphasizes that there is no discretionary leeway in determining these figures