Germany’s Long-Term Care Support and Relief Act (PUEG)

Germany's Long-Term Care Support and Relief Act (PUEG)The Bundestag passed Germany’s Long-Term Care Support and Relief Act (PUEG) on May 26, 2023. This means that significant changes in contribution collections for statutory long-term care insurance caused by the law will come into force as early as July 1, 2023.

The contribution rate for long-term care insurance rises from 3.4 % to 4.0 % (by 0.6 % for childless workers) as of July 1, 2023. In the future, workers with one child will pay 3.4% instead of 3.05% (an increase of 0.35%), with this contribution rate applying for life, regardless of the child’s age. If there is more than one child under 25, the contribution rate is further reduced:

  • Two children to 3.15 %
  • Three children to 2.90 %
  • Four children to 2.65 %
  • Five children and more to 2.40 %

Another unique feature is that this contribution rate is not divided equally between the employer and the employee, but the employer’s contribution is 1.7% of the income subject to contributions in all constellations. The employee’s share, therefore, varies between 2.4 % for childless employees and 0.7 % for five or more children.

Other employee benefits news from Germany includes the following topics, and you can read about them in Profion’s most recent newsletter.

EU Conversion Directive and occupational pensions

The declared aim of Directive (EU) 2019/2121, implemented with the amendment to the law, is to protect shareholders, creditors, and employees whose relationships with the company change due to applying a foreign legal system. In its annual report, the PSVaG pointed out the dangers this poses for the insolvency protection of occupational pensions.

Effects of the current interest rate development on the Scope of obligations in occupational pension schemes

For most EPF pension plans, the question of interest rate development does not even arise. Due to their insurance-oriented design, they remain unaffected by the current interest rate jumps. However, some pension obligations are structured, so the pension benefits must be adjusted according to the consumer price index. This is to be implemented regularly every three years (so-called adjustment review obligation under section 16 para. 1 in conjunction with para. 2 no. 1). Due to this three-year period and the current inflation rates; many companies may have to adjust their occupational pensions by 15% or more at the next adjustment date due to the accumulated inflation rates.

Inflation compensation bonus up to €3,000 tax-free

To minimize the burden of increased prices for all products and services, companies can pay their employees a voluntary benefit called ‘inflation compensation premium’ of a maximum of 3,000 euros tax-free between October 26, 2022, and December 31, 2024. The only requirement is to pay the premium with wages or salary and note that it is related to inflation.

Home office tax rebate increases in 2023

Since January 1, 2023, the home office tax rebate has been permanently anchored in tax law and has been de-funded and improved. Employees who work in a home office can claim more days and a higher value per day in 2023, up to a maximum of 1,260 euros per year. This corresponds to 210 days at six euros each, whereas for 2020 to 2022, it was only five euros and only for a maximum of 120 days (i.e., a maximum of €600).


Profion, Asinta’s employee benefits consulting Partner in Germany, provided this information on Germany’s Long-Term Care Support and Relief Act (PUEG) and the other topics addressed here. If you need support with your benefits program in the country, contact Asinta, and we will introduce you to Profion.