We pay taxes and health insurance contributions. We get free education, child benefit and later a pension. A calculator shows in which phase of our life we pay or receive more into the welfare state.
The state takes, the state gives – this is how our welfare state works. On the one hand we pay income and value added tax, pension and health insurance contributions. On the other hand, the state spends a large part of its income – around 1.6 trillion euros in 2020 – on social benefits.
Which side of the equation prevails for the individual depends largely on age. This is impressively shown by an interactive calculator by the economic researcher Martin Beznoska from the employer-related Institute of German Economics (IW) in Cologne. For people aged 0 to 85, the tool uses statistical data to show what they have to pay in taxes and duties on average and what they receive in government benefits on the other hand.
Young and old are net recipients
Benefits in kind such as education or health are also taken into account in the calculation, which results in an interesting curriculum vitae in the welfare state. Unsurprisingly, the net recipients include children, adolescents and young adults, since they attend state-funded daycare centers, schools and universities. Statistically speaking, a 15-year-old benefits from state benefits worth 11,600 euros a year.
With the entry into professional life, the picture then changes, which everyone can easily understand by looking at their payslip. On average, Germans are net contributors from the age of 24. The calculation is now dominated by income taxes and social security contributions as well as other consumption taxes. Although one also benefits from state payments such as child benefit and health insurance benefits during the working phase of life, most people pay more into the welfare state during this time than they receive in benefits.
In your mid-50s you pay the most
The sum of the taxes that individuals pay to the state each year increases up to their mid-50s. At the age of 54, the average German pays 20,500 euros a year, the most in taxes and social security contributions, while he only gets around 6,000 euros in state benefits.
At retirement age, the weights shift again – and dramatically. From the mid-60s, Germans are on average net recipients, which is of course mainly due to pensions and pensions, but also to rising health costs. From the age of 85, the annual benefits add up to 30,500 euros – whereas taxes and duties are only 6,600 euros. “For the Treasury, this becomes a mathematical problem,” says IW economist Beznoska about the figures. “Because of demographic change, it is becoming increasingly urgent to reform the social security systems.”
The values given are average values for the entire population. The IW tool also allows you to adapt the calculation to your own situation. The values for men and women can also be displayed individually or differentiated according to West and East or rich and poor. In addition, you can select or deselect items that do not apply individually, such as child benefit or unemployment benefit, in order to further individualize the result.
The calculation is based, among other things, on the extensive household data from the Socio-Economic Panel (SOEP) and the Income and Consumption Sample (EVS).
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
