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State powerless to boost crawling birth rate

Chancellor Angela Merkel's conservatives are trumpeting an electoral pledge to bump up child benefits but admit that the power of their family policy to boost the low birthrate that could take the shine off the German economy is limited.

State powerless to boost crawling birth rate
Family Minister Kristina Schröder. Photo: DPA

German women have on average 1.3 children, among the lowest rate in the industrialised world, resulting in a shrinking and ageing population that threatens long-term finances and the ability of companies to find workers.

However Family Minister Kristina Schröder does not see the government’s annual €200 billion family policy as a failure.

“I am sceptical about the capacity for politics to manage families,” she told reporters Thursday, adding that in terms of encouraging women to have more babies “my ambitions are modest.”

However Germany’s policies have often been criticised by the Organisation for Economic Cooperation and Development in Europe for hindering women being able to combine work and motherhood.

And the chancellor herself, who is childless, has highlighted several times that Germany’s family policy is wanting compared to that of neighbouring France for example.

Michaela Kreyenfeld, of the Max Planck Institute for Demographic Research, said Germany’s family policy “lacks coherence”.

“Certain mechanisms support women who work, others encourage them to stay at home, for instance,” she said.

Nevertheless Merkel’s conservatives, who are seeking re-election in three months time, plan to stay on the same path – their platform includes more tax advantages for families, and a still unspecified hike in child benefits.

Schröder, who was the first cabinet minister to give birth while in office, argues that, if people do not have children, it is often because they have not found the right partner “and on that, the state can’t do anything for them.”

But her critics say there is no reason to suppose Germans are any unluckier in love than the French, British or Icelanders who all have substantially higher birth rates.

“Germany still tries too much to solve problems with money and not enough with infrastructure” such as more creches, complained Friday’s Süddeutsche Zeitung newspaper.

Mass circulation Bild scoffed at the government having judged its family policy a success and pointed to the system in Scandinavian countries, Iceland

and France.

“It’s actually quite simple. It works everywhere where there are many women working and where there is good childcare. Why is that so difficult to understand?” wrote the paper.

In Germany, more than one woman out of three with a university education is childless, which, according to Kreyenfeld, is “because they have to choose between children and career, they don’t manage to reconcile the two.”

Juggling home and work life and the need to get more women back to work after having children is a problem the government is keenly aware of and has been seeking to address for nearly a decade.

From August 1 every child from the age of one will have the right to a childcare spot, although the promise currently looks set to be difficult to achieve given a lack of spaces in creches, which are run by local authorities.

Another problem is that German couples with children are unlikely to have more than two, unlike in France where families with three or four children are more common, according to Kreyenfeld.

“France conducts a proactive birth policy and that is not the case in Germany due to historic factors,” she said. Spurring people to have lots of children has negative connotations after the Nazi regime’s idealisation of large German families.

Vera Kreuter, of the Berlin Institute for Population and Development, said not having lots of children had now become “the social norm” and was not going to change any time soon.

But she said that was no reason to stop trying to foster a turnaround.”To stimulate the birthrate by encouraging people to fulfil their wish for a child must be an aim of family policy, not the only one, but one of them,” she said.

Merkel has warned that demographics is one of the biggest challenges that Germany faces this century as the motor of Europe’s economy faces labour shortages and its pension system becomes strained.

On visits abroad she has explicitly urged young professionals to seek work in Germany, which will eventually require some 200,000 new foreign workers per year, according to officials.

AFP/jlb

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WORKING IN GERMANY

7 tips for how to survive as a freelancer in Germany

Taking the decision to go it alone and freelance in Germany can be a daunting prospect. But, if you do it right, it can be an exciting and liberating path. Here are some of our top tips on how to survive.

7 tips for how to survive as a freelancer in Germany

1. Get a tax advisor

The German tax system is complicated, even for Germans. All the associated paperwork uses the Amtsprache (authority language) which is more like legalese than ‘normal’ German, and mistakes when filling out tax forms can cause you, at best, a massive headache and, at worst, a costly fine. So it’s best that you employ someone who knows what they’re doing to help you out.

That person is called a Steuerberater (tax advisor) in Germany. They will help you register with the tax office, correspond with them and submit your tax declarations.

Be aware that, in Germany, different deadlines apply for tax returns depending on whether you employ an official tax advisor or not. If you are doing the tax return on your own, the deadline for submitting your annual tax return is earlier than if you use a tax advisor’s services. 

READ ALSO: What NOT to do when you’re freelancing in Germany

When looking for a tax advisor, a top tip is to use your network to get recommendations. Ideally, you want someone who will do more than just fill in the forms for you, but who will actually advise you on how best to manage your business finances so that you can make tax savings.

2. Keep your accounting in order

The better you keep your own accounts in order, the easier it will be for your tax advisor to compile your tax declarations and therefore the cheaper their services will be.

As a freelancer, there are a lot of costs you can deduct from your taxes – from train tickets, working materials, to meals out – so it’s best to keep hold of all your receipts and to keep them in good order.

2 euros and 50 cents lie on a receipt in a beer garden. Photo: picture alliance/dpa | Peter Kneffel

In Germany, you’re obliged to keep hold of receipts for two years, in case of a tax inspection, so it’s a good idea to photocopy the type of machine-printed receipts you get from restaurants so that they stay legible for a long time.

There are also a few things to be aware of when writing your own invoices. Firstly, make sure that you include your tax number. This isn’t the 11-digit Steueridentifikationsnummer that everyone gets when registering in Germany, but the 10-digit Steuernummer you get from the Finanzamt after registering yourself as a freelancer. 

Most companies won’t pay you if you don’t have this on your invoices so make sure you include it.

You should also make sure that you number your invoices properly – ideally in ascending order so that you can easily keep track of them. You are not allowed to issue two invoices with the same number and if you do so and the finance office notices, you could face an inspection of your whole accounting system.

There are numerous great accounting software programmes you can use to help you, such as Lexoffice and Sevdesk and, even if you have to pay for them, the costs will be tax deductible!

3. Find out if you’re eligible for financial support

In Germany, there are several opportunities for freelancers to gain financial support and to cut their outgoings, and its worth finding out if you’re eligible for them.

If you’re claiming unemployment benefits under ALG 1 and are thinking about becoming a freelancer, the employment office offers a special type of financial support to help you to get your freelance business off the ground.

Called the Grundungszuschuss (“foundation grant”) the payment is a six-month grant equalling your monthly entitlement under ALG 1 plus €300 towards your insurance costs can be applied for those in receipt of this unemployment benefit.

READ ALSO: Will freelancers benefit from Germany’s €300 energy allowance?

If you are engaged in some form of artistic profession in Germany – which can include journalism to pottery – you may be entitled to membership to the Kunstlersozialkasse (artists’ social insurance).

Being a member of the KSK means you only have to pay half of your health insurance and pension contributions, and the KSK will pay the rest.

4. Work out how much you think you will earn

As with starting any business, you need to have some idea of your expected earnings from the outset.

If you’re just starting out as a freelancer, or have some freelance gigs on the side of an employment position, then it might be worth considering registering yourself as a Kleinunternehmer (“small business”).

As a Kleinunternehmer, you can currently earn up to €22.000 per year without having to charge VAT and having to submit only yearly tax declarations. 

An income tax declaration form lies on a table. Photo: picture alliance/dpa/dpa-Zentralbild | Hans-Jürgen Wiedl

Be aware that if you are registered as this kind of freelancer, you must include the following sentence in your invoices: ‘Gemäß § 19 UStG wird keine Umsatzsteuer berechnet’ which means ‘In accordance with Paragrah19 of the German VAT law, no VAT has been added to this invoice.’

READ ALSO: Everything you need to know about your German tax return in 2022

If you think you will earn more than €22.000 per year, you will need to pay Umsatzsteuer (VAT) and will have to submit tax declarations in advance and more often. Depending on how much you earn, this could be every month or every quarter. 

5. Get your insurance in order

In Germany, it’s a legal requirement to have health insurance.

If you’ve just made the move from employment to being a freelancer and want to keep the same health insurer, you should get in contact with your health insurance provider straight away to tell them about your change of circumstances. They will ask you to re-register and to tell them your projected freelance earnings for the year, so they can amend your monthly fees.

If you don’t keep your health insurer provider updated, you could continue to be charged the higher rate that you had from your previous salary.

The insurance cards of the health insurance companies DAK, AOK, Barmer and Techniker-Krankenkasse TK lie with euro notes under a stethoscope. Photo: picture alliance / dpa | Daniel Karmann

It’s not just health insurance you need to think about as a freelancer. It’s also wise to think about protecting yourself from any sort of claims that could arise as a result of any working mishaps. 

If, for example, you lose your laptop which contains confidential client information, you need to be protected against claims.

That’s why it’s good to have both Betriebshaftversicherung (business liability insurance) and Rechtschutzversicherung (legal protection insurance).

6. Plan your time wisely

All of these bureaucratic obligations take time. So it’s really important that you take account of that when planning your time. For example, planning half a day a week to deal with your invoices, filing, emails to clients, and conversations with authorities can be really beneficial when scheduling your working time. 

7. Grow your network

As a freelancer, networking is absolutely crucial to success. 

Keep an up-to-date profile on websites like LinkedIn and German equivalent XING and keep in contact with anyone you’ve ever worked with, no matter how brief the contact was. 

Having a network is not only about getting more clients, but also about building a support network in your field to exchange advice, tips and generally for your own enrichment. 

Participating in workshops related to your field, going to seminars, and meet-ups, can be great ways of broadening your network. 

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