New developments in funding LTC and family leave in Germany

presenter(s) Matthias von Schwanenflügel | Federal Ministry for Family Affairs, Senior Citizens, Women and Youth


Support for private LTC plans  Subsidy of € 5 €/month if the insured pays at least €10/month into plan  Legal obligation to contract; no proof of good health  Minimum age 18 years; not in receipt  Waiting period five years  Insurance is activated if the client develops LTC needs/major general care needs  Benefit rate in LTC level III at least € 600 € I. Plans – Coalition Treaty Legislative procedure: 1. Step of the LTC reform  Dynamisation of benefit rates by 4% as of 1.1.15  Increase in contribution rate to 2.35% as of 1.1.15  LTC provident fund o LTC insurance fund administered by the Deutsche Bundesbank o Means: 0.1 contribution rate points/year o Savings period 20 years; afterwards input only to stabilise contribution rate 2. Step of the LTC reform (Plans 2014/2015):  Contribution rate to rise by 0.2% to finance a new definition of LTC needs II. Care-giving leave: current status  Care-givers: assisted by pension insurance and covered by accident insurance  Care-giving Leave Act – 2 timeframe-related provisions:  Statutory right to take up to 10 days leave at short notice to (organise) care for a relative with care needs  Statutory right to take up to six months off work to care for a relative with care needs  Social insurance coverage for employees Family Caregiver Leave Act  Eligible working hours reduction to not less than 15 hours for not more than 24 months without statutory right  Employer to top up caregiver‘s salary by half the foregone amount 54  In the post-caregiving period, salary remains at reduced rate until the advance granted on it is settled  Combination of part-time work and recognition under pension law can secure pension entitlements at about the level of full-time workers III. Care-giving Leave: Plans  Creation of a statutory right to stay away from work for up to 24 months to care for a relative  Employees to be supported by either wage compensations or by interest-free loans  Aim: Further improving the balance between work and care-giving responsibilities

date 1 September 2014

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