Germany: Old-Age & Disability Provision

by Alexander Beard, on Jul 31, 2018 9:50:35 AM

Germanys‘ population in age groups 2016: i.e. 15.65 % of currently 81.58 million people are aged between 25 and 39 years; Roughly a quarter is aged 40 to 59….
Since 1972 more people die compared to new born.

Germany’s population is shrinking, from currently 81.58 million down to 76.12 million in 2050 or even 73.08 million in 2060! So 2 facts are important to understand Germanys’ challenge: shrinking and ageing at the same time in near future!

Disability pension from the government:

2015: Women on average: € 640 in Western Germany (€ 717 East), Men on average € 702 (€ 643 East).
Additional Disability cover – as EB or privately covered – is core!

How to read?

Left pillar:
The level of net income while working, being healthy and able to do your job properly (100%)
Up to € 78,000 gross income

2nd pillar:
Illness: the medical doctor “approves” that you can’t work.
Employer will still have to pay your salary for the following 6 weeks!

3rd pillar:  
Health Insurance / State Health Care / State Medical Care:
Will pay 70% from Gross (up to € 53,100 annual gross income!) Max. 78 weeks

4th pillar:
Disability: No state cover for people /employees born later than Jan 1st 1961

5th pillar: 
You can’t work for more than 6 hrs per day (in any job!)
25% (up to € 53,100 annual gross income!) from State pension system
~19% from last gross income

6th pillar:
You can’t work for more than 3 hrs per day (in any job!)
50% (up to € 53,100 annual gross income!) from State pension system
~38% from last gross income

7th pillar:
Your old-age – pension will become very low as you will miss to pay into the system….

1 out of 5 employees are becoming disabled during their working life.

Health insurance will cover the cost in hospital. In case of an accident the accident and dismemberment insurance will cover the dismemberment due to the accident. However in case of a disability due to illness none of the above mentioned will cover the replacement of your income.
Due to statistics it is happening 9-times more often to become disabled due to illness than due to an accident.

Cancer and psychological injuries are the most often reasons to become disabled!

Professions with low and with high risk to become disabled during working life:











In so far professionals with academic education seem to be less affected by disability than a craftsperson. However mental stress can easily lead to psychological indisposition.

Rüdiger Blaich
Country Manager - Germany (AB International Benefits B.V.)