Financially speaking, it's been a tough few years for people in Germany. Since the severe energy crisis hit in the wake of Russia's war on Ukraine, the cost of everyday necessities has soared, and people are still feeling the pinch everywhere from the supermarket to the petrol pump.
The government has tried to offer some tax relief, but there's another source of pain for German workers: the spiralling cost of social contributions like pension and health insurance, which are deducted from their pay each month.
At the start of the year, most employees in Germany will have noticed these social contributions eating away at more of their salaries. That's because the government has increased care insurance and allowed health insurers to hike their additional contributions.
This has brought the cost of social contributions up to dizzying new heights.
How much have social contributions gone up?
For care insurance, the standard rate of 3.4 percent was increased to 3.6 percent on January 1st, 2025. People with no children pay an extra 0.6 percent, bringing their contributions up to 4.2 percent per month. Workers with more than one child pay a slightly reduced rate, depending on how many children they have.
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Though employers generally pay half of an employee's social contributions, this time the employer contributions will remain static at 1.8 percent. That means that workers will bear the full brunt of the 0.2 percent increase themselves.
Meanwhile, additional health insurance contributions - which can be levied on top of the general contribution rate of 14.6 percent - are allowed to be increased by 0.8 percent to 2.5 percent this year.
Depending on how much an insurance fund previously charged, this could mean a doubling of additional costs. Techniker Krankenkasse (TK), for example, have hiked their additional contributions from 1.2 percent to 2.45 this year - an increase of 1.25 percent.
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For an average German worker, social contributions for pensions, health, long-term care and unemployment now amount to a record 41.9 percent of their salary - though half is paid by their employer. For freelancers, who tend to pay the full amount themselves, the situation is even more extreme.
According to Manager Magazine, the recent increases mean contributions are currently the highest they've been in more than twenty years.
Why do contributions keep rising?
A major reason is simply the maths of Germany's aging population. With an increasing number of workers from the Baby Boomer generation entering retirement each year, there are far fewer people paying into the health, care and pensions system, while more senior citizens are relying on it.
At the same time, the statutory insurance funds (GSV) have been battling huge financial backlogs in the aftermath of the Covid-19 pandemic, which placed the healthcare system under enormous strain. This year, the estimated deficit amounts to €13.8 billion.
Health Minister Karl Lauterbach (SPD) believes the hikes in additional contributions could help fill this hole, along with other measures.
In the run-up to the snap elections in February, the increased cost of health and social care has emerged as a key campaign issue. Chancellor candidates have been fielding their ideas for halting the endless contribution hikes, from incentivising working longer to pouring more taxpayer money into the pot.
What would parties do to stem the rise in social contributions?
Across the full political spectrum, parties agree that the rising social contribution costs are a major problem. However, each of them has their own unique perspective on how to deal with it.
Here's what the manifestos have to say.
Social Democratic Party (SPD)
A key proposal of the centre-left SPD is to merge the private and statutory health insurance funds into one overarching 'Citizens' Insurance'. This would prevent (mostly affluent) people from opting out of paying into the system by going private, and could therefore be a financial boost for the insurance fund in general.
The Citizens' Insurance plan was part of the SPD's manifesto during the last elections in 2021, but was ultimately torpedoed by the party's coalition with the pro-business FDP.
This time around, the SPD also want to put more taxpayer money into the health insurance funds, for example to assist with paying insurance for jobseekers. However, the party says its tax plans will also result in lower bills for 95 percent of taxpayers.
Christian Democratic Union (CDU) & Christian Social Union (CSU)
According the centre-right CDU and CSU parties, the issue of rising social costs can be solved by creating a strong and competitive economy. If more jobs are created, more people will be paying into the system, they argue. However, they are also suggesting a scheme that could encourage more seniors to stay in the workplace.
Under the so-called “Active Pension” model, employees could earn up to €2,000 per month tax-free if they choose to continue working beyond retirement age.
“We are offering retirees an attractive incentive to voluntarily remain in the workforce,” CDU General Secretary Carsten Linnemann told Bild.
“Without a strong economy, there can be no strong and fair social state. Our entire program is geared toward growth, leading to higher wages and stable social security contributions.”
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Green Party
For the centre-left Greens and their chancellor candidate, Robert Habeck, the answer to the social contribution crisis echoes that of the SPD.
The Greens want central government to put more money into the health and care system out of its own coffers, as well as combining private and public insurance to increase overall funds.
In addition, the party is hoping to find ways to encourage more women to work full-time. This would not only be a boost to the economy, but would also boost the health and pension funds, they argue.
Free Democratic Party (FDP)
The liberal FDP are set on lowering social contributions after the next election. To do this, they would partly rely on investments in financial markets to reap the biggest return on the money that's paid in.
In addition, the party wants to offer cuts in social contributions to people who take better care of their health, for example by booking more preventative check-ups.
What the other parties say
The far-right AfD have relatively little to say when it comes to solving rising social contributions, other than cutting administration costs by merging the health and the long-term care funds. In addition, the party says it would put more taxpayer money into the system.
Meanwhile, the left-wing Linke party have pledged to slash health contributions from 17.1 to 13.3 percent by ensuring everyone has to pay into the system - including those who are currently privately insured.
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The Sahra Wagenknecht Alliance (BSW) - a new populist party set up by Linke defector Sahra Wagenknecht - takes a similar stance, demanding an end to the current "two-class system" split between public and private patients.
Instead, the party wants to introduce a system where every taxpayer contributes according to their income and no additional contributions are levied by insurers.
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