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Welfare State and Work

This topic covers the welfare state (Sozialstaat) and working life in Germany. The Sozialstaat is a basic principle of the Grundgesetz: the state is meant to provide social security and soften social inequality. In practice, this mainly works through Sozialversicherung, social insurance made up of five branches: health insurance, pension insurance, unemployment insurance, long-term care insurance, and accident insurance.

For the test, it matters which insurance covers which risk. Health insurance covers treatment costs, pension insurance pays out in old age, unemployment insurance helps after job loss, long-term care insurance helps when someone needs care, and accident insurance covers workplace accidents. Employees and employers usually split the contributions to these insurance branches.

A common trap: the five insurance branches are easy to mix up, especially health insurance and long-term care insurance, which are related but cover different things. Terms around working life also come up often, such as the difference between a Gewerkschaft (trade union, representing employees) and an employer association, or between a Tarifvertrag (collective agreement) and the Mindestlohn (minimum wage). The minimum wage is the lowest hourly rate set by law, while a collective agreement can set different, usually higher, wages for a specific industry.

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