Academic journal article Social Security Bulletin

Debate over Extended Care Continues in Germany

Academic journal article Social Security Bulletin

Debate over Extended Care Continues in Germany

Article excerpt

The German Labor Minister has proposed that a provision for extended care as a matter of right be included in the social security system, and has introduced legislation to accomplish this. Currently, extended-care assistance is on a means-tested basis and is payable only after an individual has exhausted his or her resources. The proposed legislation would provide cash payment to the beneficiary at home (the amount depending on the degree of disability), payment towards nursing home costs when warranted, and gratuitous social security credit for persons whose earnings are diminished because they spend a significant amount of time caring for a beneficiary. A beneficiary who chooses to remain at home and receive benefits in kind--such as visiting nurse service--in lieu of cash could receive a greater cash equivalent in benefits. Workers who are exempt from the statutory scheme but have full medical coverage under private insurance, would be required to add a rider to their policies to cover similar extended-care benefits.

The extended-care benefit would be administered by the sickness insurance system and financed by a 1-percent tax on covered earnings effective in January 1994. The tax would be increased to 1.7 percent in January 1996 and the cost evenly split between worker and employer. To ease the burden on employers, who are already financing directly over one-third of Germany's 1 trillion Mark (US$600 billion) social welfare budget, the employers would be relieved of the obligation to pay for the first 2 days of sickness benefits, up to a maximum of 6 days each year. …

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