A leading economic advisor is warning of potentially significant increases in social security contributions in Germany, projecting a possible rise to 50% of gross income. Martin Werding, a member of the Council of Economic Experts, cautioned that without substantial reforms, the upward trend in contribution rates will continue unabated throughout the 2030s.
Werding’s assessment, published in the Rheinische Post, emphasizes the impact of Germany’s aging population, which is placing increasing pressure on social security systems. He anticipates further contribution increases as early as 2026. Health insurance contributions have already surpassed 17% of gross income at the start of the year and several insurance funds have subsequently raised supplemental contributions, pushing the average likely to around 17.5%. Overall social security contributions are expected to rise from 42% to 43% this year, exacerbated by planned increases in long-term care insurance.
Looking further ahead, Werding suggests that pension contributions, which have remained stable at 18.6% for an extended period, could surge to nearly 20% by 2027 or 2028. This escalation would potentially lead to a total tax and contribution burden of approximately 45% by the end of the current legislative period.
The advisor stressed that existing proposals to address the situation, such as adjustments to contribution assessment limits and the inclusion of civil servants in social security schemes, are insufficient to manage the escalating financial strain. He emphasizes that these measures often create deficits elsewhere, particularly impacting the budgets of regional states responsible for the majority of civil servants.
Werding advocates for broader discussions focused on expenditure management, the accuracy of current benefit provisions – including initiatives such as the guarantee of statutory pension levels and the “mothers’ pension” – and the efficiency of healthcare and long-term care services. He urges a comprehensive review of existing practices and plans to ensure the sustainability of Germany’s social security framework.
