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The German Welfare State: An Overview Katharina Kunien Katharina Kunien, M.A. | Institute of Sociology Agenda 1 Origins of the German Welfare State 2 The Contemporary German Welfare State 3 Areas of the German Welfare State 3.1

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Katharina Kunißen, M.A. | Institute of Sociology

The German Welfare State: An Overview

Katharina Kunißen

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Katharina Kunißen, M.A. | Institute of Sociology

Agenda

1 Origins of the German Welfare State 2 The Contemporary German Welfare State 3 Areas of the German Welfare State

3.1 Unemployment Insurance (“Arbeitslosenversicherung”) 3.2 Health Insurance (“Krankenversicherung”) 3.3 Disability Insurance (“Berufsunfähigkeitsversicherung”) 3.4 Old Age: Pensions (“Rentenversicherung”) 3.5 Old Age: Long-Term Care (“Pflegeversicherung”)

4 Current Challenges of the German Welfare State 5 Summary and Discussion

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Katharina Kunißen, M.A. | Institute of Sociology

1 Origins of the German Welfare State: The Bismarckian System

à 1883: Health Insurance Bill à 1884: Accident Insurance Bill à 1889: Old Age and Disability Insurance Bill à 1927: Unemployment Insurance Bill

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Katharina Kunißen, M.A. | Institute of Sociology

1 Origins of the German Welfare State: The Bismarckian System

Bismarckian System the alternative: Beveridge System Entitlement contribution (employment) citizenship Financing income à social insurance taxes Insurer

ccupational

state Benefits based on previous income lump sum

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Katharina Kunißen, M.A. | Institute of Sociology

2 The Contemporary German Welfare State

à 1883: Health Insurance Bill à 1884: Accident Insurance Bill à 1889: Old Age and Disability Insurance Bill à 1927: Unemployment Insurance Bill à 1995: Long-Term Care Insurance Bill

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Katharina Kunißen, M.A. | Institute of Sociology

2 The Contemporary German Welfare State: The Conservative System (… plus some liberal and social democratic elements…)

“earnings-related” “replication of inequality“ “preservation of status“ “traditional familyhood“ “subsidiarity“ “additional private insurance schemes”

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Katharina Kunißen, M.A. | Institute of Sociology

3 Areas of the Welfare State

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Katharina Kunißen, M.A. | Institute of Sociology

Unemployment benefit I Unemployment benefit II ”Hartz IV“

Condition Having worked 12 months in the last 2 years Benefit About 60% of net income Financed mainly by individual & employer Condition Not/ no longer entitled to benefit I Benefit Fixed rate + housing + additional needs Financed by State/ taxes

3.1 Unemployment Insurance

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Katharina Kunißen, M.A. | Institute of Sociology

3.2 Health Insurance

1 Public health insurance 2 Private health insurance (self-employed, state servant, voluntary choice)

Benefit Covers most medical costs Financed mainly by individual & employer Benefit Covers most medical costs Financed mainly by individual (self-employed) individual & employer (state servants)

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Katharina Kunißen, M.A. | Institute of Sociology

3.3 Disability Insurance

1 During the first 6 weeks 2 More than 6 weeks, less than 78 weeks 3 Indefinite inability to work

Condition Previous employment Benefit Usual wage Financed by employer Condition Previous employment Benefit

Max. 90% of net income

Financed by Health insurance Benefit Fixed rate + housing + additional needs (“Sozialhilfe”) Financed by State/ taxes

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Katharina Kunißen, M.A. | Institute of Sociology

3.4 Old Age: Pensions

Benefit Fixed rate + housing + additional needs (“Sozialhilfe”) Financed by State/ taxes

1 Regular pension 2 Not eligible for regular pension

Condition Employment and age (65 years/ 67 years) Benefit Based on length of employment + income + weights Financed mainly by individual & employer

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Katharina Kunißen, M.A. | Institute of Sociology

1 Regular long-term care insurance 2 Not eligible for regular long-term care

3.5 Old Age: Long-Term Care

Benefit Necessary costs Financed mainly by individual & employer Benefit Necessary costs Financed by State/ taxes

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Katharina Kunißen, M.A. | Institute of Sociology

4 Current Challenges of the German Welfare State

versus

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Katharina Kunißen, M.A. | Institute of Sociology

5 Summary and Discussion

Most benefits provided by German welfare state are financed through contributions by employers and employees. If a person is unable to contribute to the insurance schemes, the state ensures a basic income (“Sozialhilfe”). Demographic change and longevity increase the need for private (additional) insurance schemes. Additional (active) measures include e.g. active labour market policies.

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Katharina Kunißen, M.A. | Institute of Sociology

Bibliography

All pictures are licensed under the the Creative Commons Zero (CC0) license

Castles, Francis G./ Leibfried, Stephan/ Lewis, Jane/ Obinger, Herbert/ Pierson, Christopher (Eds.) (2010): The Oxford Handbook of the Welfare State. Oxford: University Press. Esping-Andersen, G. (1990). The three worlds of welfare capitalism. Cambridge, UK: Polity Press. Schmidt, Manfred G./ Ostheim, Tobias/ Siegel, Nico A./ Zohlnhöfer, Reimut (Eds.) (2007): Der

Wohlfahrtsstaat. Eine Einführung in den historischen und internationalen Vergleich.

The German Welfare State: An Overview

Katharina Kunißen

Agenda

1 Origins of the German Welfare State 2 The Contemporary German Welfare State 3 Areas of the German Welfare State

3.1 Unemployment Insurance (“Arbeitslosenversicherung”) 3.2 Health Insurance (“Krankenversicherung”) 3.3 Disability Insurance (“Berufsunfähigkeitsversicherung”) 3.4 Old Age: Pensions (“Rentenversicherung”) 3.5 Old Age: Long-Term Care (“Pflegeversicherung”)

4 Current Challenges of the German Welfare State 5 Summary and Discussion

1 Origins of the German Welfare State: The Bismarckian System

à 1883: Health Insurance Bill à 1884: Accident Insurance Bill à 1889: Old Age and Disability Insurance Bill à 1927: Unemployment Insurance Bill

1 Origins of the German Welfare State: The Bismarckian System

Bismarckian System the alternative: Beveridge System Entitlement contribution (employment) citizenship Financing income à social insurance taxes Insurer

state Benefits based on previous income lump sum

2 The Contemporary German Welfare State

à 1883: Health Insurance Bill à 1884: Accident Insurance Bill à 1889: Old Age and Disability Insurance Bill à 1927: Unemployment Insurance Bill à 1995: Long-Term Care Insurance Bill

2 The Contemporary German Welfare State: The Conservative System (… plus some liberal and social democratic elements…)

“earnings-related” “replication of inequality“ “preservation of status“ “traditional familyhood“ “subsidiarity“ “additional private insurance schemes”

3 Areas of the Welfare State

Unemployment benefit I Unemployment benefit II ”Hartz IV“

Condition Having worked 12 months in the last 2 years Benefit About 60% of net income Financed mainly by individual & employer Condition Not/ no longer entitled to benefit I Benefit Fixed rate + housing + additional needs Financed by State/ taxes

3.1 Unemployment Insurance

3.2 Health Insurance

1 Public health insurance 2 Private health insurance (self-employed, state servant, voluntary choice)

Benefit Covers most medical costs Financed mainly by individual & employer Benefit Covers most medical costs Financed mainly by individual (self-employed) individual & employer (state servants)

3.3 Disability Insurance

1 During the first 6 weeks 2 More than 6 weeks, less than 78 weeks 3 Indefinite inability to work

Condition Previous employment Benefit Usual wage Financed by employer Condition Previous employment Benefit

Financed by Health insurance Benefit Fixed rate + housing + additional needs (“Sozialhilfe”) Financed by State/ taxes

3.4 Old Age: Pensions

Benefit Fixed rate + housing + additional needs (“Sozialhilfe”) Financed by State/ taxes

1 Regular pension 2 Not eligible for regular pension

Condition Employment and age (65 years/ 67 years) Benefit Based on length of employment + income + weights Financed mainly by individual & employer

1 Regular long-term care insurance 2 Not eligible for regular long-term care

3.5 Old Age: Long-Term Care

Benefit Necessary costs Financed mainly by individual & employer Benefit Necessary costs Financed by State/ taxes

4 Current Challenges of the German Welfare State

versus

5 Summary and Discussion

Bibliography

All pictures are licensed under the the Creative Commons Zero (CC0) license

Springer: VS Verlag. Sozialgesetzbuch der Bundesrepublik Deutschland. 46th edition.