Demographic change is increasing pressure on the social security system, leading to rising social insurance contributions without reforms. This particularly burdens low-income households, which already have to make high contributions in relative terms.
Since tax reliefs primarily benefit the middle class, low-income households should be relieved within the framework of social security contributions. According to model calculations, a general allowance leads to a significant reduction in the contribution burden.
However, such a measure is costly and could potentially have a counterproductive effect in the long term due to lower payments into the statutory pension insurance. A more promising approach is an allowance on contributions to statutory health insurance, as the financial burden is relatively high, but the principle of equivalence is not violated. To keep the costs of an allowance manageable, it seems sensible to grant allowances only to a targeted, clearly defined group.
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About this series
The series informs in a concentrated form about important positions of the Konrad-Adenauer-Stiftung on current topics. The individual issues present key findings and recommendations, offer brief analyses, explain the Foundation's further plans and name KAS contact persons.
