PUEG Long-Term Care Support and Relief Act
The Care Relief Act, which was already announced at the end of 2022, was now approved by the German Cabinet on April 5, 2023. The proposed law is called the Care Support and Relief Act – PUEG 2023 in short. There is to be more money for care benefits in kind and care allowance, and the right to care support allowance is to be increased. These and other innovations are to be financed by an increase in contributions to long-term care insurance.
Aims of the new Long-Term Care Support and Relief Act
The PUEG has set itself the aim of improving long-term care. The specific goals of the PUEG law are:
- Care at home is to be strengthened and family caregivers are to be relieved.
- Working conditions for professional care workers are to be improved.
- Digital services for people in need of care and caregivers are to be made more accessible and easier to use.
- Long-term care insurance is to be strengthened through more revenue.
Many technical and legal changes have to be taken into account in this context for tax and payroll accounting cases, especially with relation to the calculation of contributions. Here we would like to refer to the follow internet page: www.pflege.de
Adjustment of long-term care insurance contributions
The PUEG provides for an increase of 0.35 percentage points in the contribution rates for long-term care insurance.
This increase is aimed at guaranteeing that the existing care benefit payments and the changes planned in the PUEG in the social care insurance system are financially secure.
In the past, there have been additional financing requirements at short notice, so the government is authorized to adjust the contribution rate quickly in such cases.
Contributions with and without children
Even before the Long-Term Care Relief Act, the Federal Constitutional Court had already ruled in April 2022 that social long-term care insurance contributions for parents had to be calculated differently. Parents had to pay therefore since 01 July 2023 0.35 percent less contributions than childless – the so-called childless premium.
The PUEG increases the childless supplement to 0.6 percent. Childless members will pay a total contribution rate (employee and employer contributions) of 4 percent, while members with one child will pay a reduced rate of 3.4 percent. This is to take into account the child-rearing expenses of parents in the social long-term care insurance contribution law.
Members with multiple children receive a discount of 0.25 percentage points for each child from the second to the fifth child. However, children older than 25 years of age are not included in the calculation of the deduction. The deduction applies until the month in which the child in the case turns 25.
Example calculation for the new contribution rates to long-term care insurance
The following contribution rates apply:
|For members based on the amount of children||contribution rates|
|Members without children||4,00% (Employee share of 2,30%)|
|Members with one child||3,40% (Employee share of 1,70%)|
|Members with two children||3,15% (Employee share of 1,45%)|
|Members with three children||2,90% (Employee share of 1,20%)|
|Members with four children||2,65% (Employee share of 0,95%)|
|Members with five or more children||2,40% (Employee share of 0,70%)|
Note: A difference is made between additional children and deduction children. A additional child is any child of the employee; a deduction child, on the other hand, is any child under the age of 25.