Social security: care contributions will continue to rise in 2025

Nursing care insurance will become more expensive again in the new year due to rising billion-dollar costs. The Federal Council agreed to an increase in contributions by 0.2 percentage points to 3.6 percent of gross wages as of January 1, 2025, according to a federal government regulation. This is expected to bring in additional revenue of 3.7 billion euros per year. This means that the financing of the statutory benefits will be secured again from 2025, according to the regulation. The care contribution was last increased in the summer of 2023.

There are differences in the specific contribution amount depending on the number of children. For insured people with one child it will be 3.6 percent in the future; for people without children the contribution will rise to 4.2 percent. With two children the contribution will now be 3.35 percent, with three children it will be 3.1 percent, with four children it will be 2.85 percent and with five or more children it will be 2.6 percent. This includes an employer contribution of 1.8 percent.

Financial pressure due to rising costs

The reason for the increase is that spending on care has continued to rise for years – including to pay for urgently needed nursing staff. Recently, the number of people in need of care has increased significantly faster than would have been expected for purely demographic reasons, the federal government explains in the regulation. Financial consequences of the corona pandemic also had an unfavorable impact. “Without an increase in the contribution rate there would be a risk of system failure.”

The umbrella association of statutory health insurance companies, which also represents the nursing care funds, called the increase in contributions an “emergency measure” to temporarily secure financial stability. In the best case scenario, this will last until the end of 2025, but the fundamental financing problem in care will not be solved, said association boss Doris Pfeiffer. “The contribution rate increases that have become almost a matter of course for those politically responsible in the federal government must not be a permanent solution.”

Call for major financial reform

The social association VdK warned that it was becoming apparent that the contribution would have to be increased again in 2025. “This could even become necessary before the new Bundestag is constituted,” said President Verena Bentele. The financing of nursing care funds must therefore be completely reformed and a mechanism created that ensures long-term financing. The new government should address this.

Health Minister Karl Lauterbach (SPD) actually aimed for a major financial reform for nursing care in the fall, but this no longer comes about after the traffic light coalition broke up. The government now made use of a regulation that was created in the 2023 care reform. Accordingly, the government may adjust the contribution “to ensure solvency in the medium term” by regulation if the funds available for long-term care insurance are in danger of falling below one month’s expenditure.

Also improvements for those in need of care

The nursing care funds had announced that there was a risk of being in the red in 2024 and 2025 after nursing care insurance was in the black in 2023 thanks to the premium increase. In addition to the increase in contributions, improvements for those in need of care will also take effect on January 1, 2025, which had also already been decided in the 2023 reform: All care services will be increased by a flat rate of 4.5 percent.