A leading economic advisor has cautioned that social security contributions in Germany could rise to as much as 50 percent of gross income if significant reforms are not implemented. Martin Werding, a member of the Council of Economic Experts, voiced his concerns in an interview with the “Rheinische Post” highlighting the escalating financial pressures stemming from an aging population.
Werding predicts a further increase in contributions as early as 2026. Health insurance contributions have already surpassed 17 percent of gross income at the beginning of the year, with several insurance providers subsequently increasing supplementary contributions. The overall social security burden is expected to rise from 42 to 43 percent this year, considering planned increases in the care insurance sector.
Looking ahead, Werding anticipates that pension contributions, which have remained relatively stable at 18.6 percent, could sharply increase to approximately 20 percent by 2027 or 2028. This trajectory suggests a potential tax burden of 45 percent by the end of the current legislative period.
The advisor stressed that current proposed measures, such as adjusting contribution assessment bases and incorporating civil servants into social security systems, are insufficient to manage this dynamic. He argues that some of these measures simply shift the financial strain elsewhere, potentially impacting state budgets.
Werding called for a broader discussion focused not only on revenue generation but also on expenditure development, the precision of existing benefits and the efficiency of healthcare and long-term care systems. The sustainability of programs like the guaranteed pension level and the “mothers’ pension” should also be critically examined, he added.