Economic expert Martin Werding has raised alarms over the rising social contributions in Germany, predicting they could reach 50 percent of gross income without significant reforms. Currently, these contributions stand at approximately 42 percent, with expectations to increase to 43 percent within the year, driven by demographic shifts and increasing costs in social systems such as healthcare and pensions. The aging population is a primary factor, intensifying financial pressures on social security systems.
Werding anticipates further hikes in contributions, starting with health insurance premiums, which have already surpassed 17 percent and are likely to continue rising. He forecasts that pension contributions, stable at 18.6 percent for a while, could leap to nearly 20 percent by 2027 or 2028. This would push the burden to 45 percent by the end of the current legislative period.
The increasing financial strain is mirrored in the broader tax landscape, with the Federation of Taxpayers criticizing the growing share of taxes and social contributions in workers' incomes. In 2023, households are expected to allocate 52.9 percent of their income to these obligations, exacerbated by rising social insurance contributions and energy costs.
Both Werding and the Federation underscore the need for urgent reforms, warning that current discussions, such as raising contribution assessment limits or integrating civil servants, are inadequate. They advocate for a shift towards greater financial responsibility and reduced state expenditure, urging the government to better allocate funds intended for investments and climate protection.
