The German population is getting older. This means that more and more people need to be cared for as they get older. In many cases, however, the pension or assets are not sufficient to cover the care costs in the long term. Who then has to bear the costs?
If the strength dwindles in old age or age-related diseases such as dementia no longer allow independent living, a care place must be found – either with an outpatient care service or in an inpatient nursing home.
But the monthly maintenance costs can quickly run into the thousands. According to a study by the Association of Substitute Health Insurance Funds (vdek), the personal contribution of a cared for inpatient care in July 2022 was an average of 2248 euros per month. Even those who have saved a lot in life or receive a handsome pension quickly find themselves in the situation that they cannot bear these costs themselves in the long term. In such a case, do the children have to pay for the maintenance of the parents? An overview.
What costs does a person in need of care have to cover themselves?
Basically, if you need care, you first have to pay for it yourself, explains Silke Lachenmaier, consultant in the health and care department of the Rhineland-Palatinate consumer center. “Before you look at the children, it is important to check what resources the parents have to spend themselves,” explains Lachenmaier in an interview with the star.
Although some costs can be covered by the statutory long-term care insurance, in most cases the monthly costs significantly exceed the subsidies from the insurance companies. Accordingly, many people in need of care have to pay the outstanding amounts “out of their own pocket”. To do this, the monthly earnings are used first. These are usually the pension payments and any additional income, for example from rentals or the like. If these amounts are not sufficient either, those in need of care must cover further costs from their assets.
Do people in need of care have to use their entire assets to cover their care costs?
Here, Lachenmaier clears up a misunderstanding: “It’s a misconception that everything has to be used up.” Among other things, those in need of care are entitled to a so-called protective asset of 5000 euros. Lachenmaier warns that this should not be touched under any circumstances – not even to advance costs: “If the protective assets are used up, the social welfare agency will not refill them.”
Apart from the savings, however, those in need of care must use all of their assets to pay for care costs. This includes houses and apartments. If a single person in need of care has to move from their own property to a nursing home and this property is correspondingly empty, it must be sold, Lachenmaier explains: “This is a realizable asset that must also be used for the care costs.”
Theoretically, it is also possible to rent out the property, according to the advisor to the consumer advice center in Rhineland-Palatinate. But this is only permissible if the rental income completely covers the outstanding care costs. With the current care costs of between 2,000 and 3,000 euros per month, this is very rarely the case, according to Lachenmaier.
Who has to step in when the assets of those in need of care are used up?
A large fortune or a property that can be sold and used for care costs is of course not the norm. So who has to pay for the costs when the assets of a person in need of care are used up? Basically, the following applies here: If a person in need of care is not able to pay their care costs, there are two possible parties who can step in: their own children or the social welfare office.
Many children are understandably afraid of having to pay for their parents’ care costs and of becoming poor themselves. However, as Lachenmaier explains, this fear is unfounded: “For the children of those in need of care, the situation has eased since 2020 thanks to the Relatives Relief Act. They are only obliged to provide maintenance if their annual gross income is over 100,000 euros.” There are no exceptions to this rule. The children’s assets are also completely irrelevant in such a case, Lachenmaier explains: “Only the income is taken into account. If this is less than 100,000 euros, then the assets are irrelevant. It could be that you have several hundred thousand euros in assets saved has, but the annual gross income is below this threshold. Then you are not obliged to pay maintenance.”
However, the situation is different for children who earn more than 100,000 euros. In principle, these are subject to maintenance.
How much do higher earners have to pay for caring for their parents?
According to Lachenmaier, the amount to which people with an income of more than 100,000 euros have to contribute to the care costs of their parents cannot be specified as a flat rate. In such a case, she recommends consulting a lawyer in order to calculate the actual burden. By law, a dependent child is entitled to a so-called “self-support” of 2000 euros net as a single person or 3600 euros net as a married couple. However, that doesn’t mean anything beyond that is collected for care costs.
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In order to determine the actual burden, the adjusted net income is first calculated – i.e. the income after deduction of taxes and social security, contributions to pension schemes, servicing of interest and loans, insurance and all other expenses of daily life. All of these positions can be specified as “reducing income”. The following principle applies here: Parental maintenance must not jeopardize one’s own livelihood.
From the income that is left after deducting all your own costs and self-support, half has to be used for the care costs of the parents.
But there are special cases here too: If the child’s monthly burdens are so high that parental maintenance cannot be paid despite the high income, it may be checked whether the child’s assets could be used to pay for it, according to Lachenmaier. “But here, too, protective assets must be considered.”
How is the contribution to the care costs divided among several children?
If a person in need of care has several children, the first thing to be considered here is how many children exceed the income limit of 100,000 euros. The children who are below the limit do not have to pay child support. If a child is above the limit but his siblings are not, this child is solely responsible for maintenance. If several children are above the limit of 100,000 euros, the parental maintenance will be divided among them.
What counts as “income” anyway?
“In principle, everything that is classified as income under income tax law,” explains Lachenmaier. Logically, this includes the salary, income from renting or leasing, as well as income from capital contributions such as dividends from stock transactions. On the other hand, deposits in shares or funds themselves count as assets.
Are there loopholes to “save” one’s own wealth or that of one’s parents?
If the parents’ assets are used up and none of the children earns more than 100,000 euros, the social welfare office will cover further care costs – no matter how large the children’s assets are at that time. So the idea is obvious, before the care costs burden the parents’ assets, to quickly give them away to the children and let the social welfare office bear the costs. But the own share of the care costs cannot be avoided that easily, explains Lachenmaier: “The whole thing has a time component. Of course I can give money to my children, but these gifts must be more than ten years ago so that the social welfare office cannot claim them back .”
This is a civil law claim – to put it simply: All donations made in the past ten years, especially monetary gifts, can be reclaimed by the social welfare office. Exceptions to this are so-called “decency gifts”, i.e. smaller donations, for example for birthdays. According to Lachenmaier, the social welfare office has the right to view bank statements for the past ten years.
The situation is similar with real estate. Many parents would have their house or apartment signed over to their children at an early stage and be assured of a lifelong right of residence. But here, too, the period of ten years should be observed in order to be on the safe side from a legal point of view. Otherwise, the social welfare office could certainly reclaim the property as an asset or demand compensation to cover the care costs, Lachenmaier explains.
What exceptions are there?
In principle, all children are obliged to pay parental maintenance if their gross annual income is more than 100,000 euros. This also applies if contact between parents and children is broken off prematurely.
But there are certain constellations in which children can be exempted from this payment. These include, for example, long-term addictive behavior of the parent, neglect of the child or cases of violence and/or abuse.
But the problem with this question is the evidence, Lachenmaier explains: “A factual presentation is not sufficient. You have to prove this accusation with written documents, documents or witnesses.” This is exactly what makes it difficult in many cases to prove neglect or violence in the parental home.
In the case of adopted children, the social parents take the place of the birth parents. Accordingly, the child must pay maintenance, if at all, for the adoptive parents, but not for its biological parents.
Source: Stern
