Increased Social Contributions for High-Income Individuals Planned by Labour Ministry Starting 2026
The Federal Ministry of Labour has sent a draft regulation for consultation to other departments, outlining plans for an increase in social security contributions for high-income individuals. The proposals, which are part of a broader discussion on addressing the financial challenges faced by insurers, include an increase in the contribution assessment ceiling for social security contributions in both statutory health and pension insurance.
Starting January 1, 2023, the contribution assessment ceiling for social security contributions in the statutory health insurance will increase from 5,512.50 euros per month to 5,812.50 euros per month. This increase, aimed at stabilizing the tense financial situation of the insurers, will result in high-income individuals paying more into their social security contributions next year.
Similarly, the contribution assessment ceiling for social security contributions in the statutory pension insurance will increase from 8,050 euros per month to 8,450 euros per month, also starting January 1, 2023.
Planned changes in statutory health insurance for 2025 include an increase in the average additional contribution rate from 1.7% to around 2.5–3.1%, on top of the general contribution rate of 14.6% of gross income. The contribution assessment ceiling will rise to €5,512.50 monthly, limiting the income subject to contributions. The compulsory insurance threshold for employees in the statutory health insurance is planned to be raised from the current 6,150 euros gross monthly income to 6,450 euros per month starting in 2026.
These proposals have been advocated for by political figures such as Christos Pantazis, SPD health expert, who has suggested that high earners should pay more into the statutory health insurance, and Janosch Dahmen, health policy spokesman of the Greens, who has advocated for an increase in the contribution assessment ceiling "step by step to the level of statutory pension insurance".
It is important to note that the exact details of the draft regulation are available to the German Press Agency, and while the proposals for increasing the contribution assessment ceiling are not yet finalized and are under consultation with other departments, the increase in social security contributions for high-income individuals is expected to take effect next year.
The increase in the contribution assessment ceiling is adjusted annually in line with wage developments, and the proposals form part of a broader effort to address the financial challenges faced by the insurers. No specific date for the implementation of the proposed increase in the contribution assessment ceiling has been mentioned.
The draft regulation, which increases the contribution assessment ceiling, was previously reported on by the portal "Politico" and is currently under consultation with other departments. The public will be kept informed as the consultation process progresses and the final decisions are made.
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