Minister Linnemann described the long-term care system as being under “enormous financial pressure,” arguing that structural changes are necessary to ensure its sustainability. He clarified that while payments funding the system will remain unchanged for most workers, contributions will increase for childless individuals and high-income earners. Linnemann denied that the package constitutes an austerity measure, emphasizing that the reforms are intended to stabilize the insurance fund rather than cut essential services. The governing coalition, which includes the Christian Democratic Union and the Social Democratic Party, approved the draft in the cabinet, although some SPD politicians have recently criticized the plan for relying on spending cuts and reduced benefits to improve the programme’s financial position.
The 249-page draft bill introduces a reorganization of care levels, consolidating the existing classification system and applying stricter criteria for eligibility. Previously, the first care level was attainable with 12.5 points in the assessment module; under the new rules, 15 points will be required. Similarly, the thresholds for care levels two and three are being raised, while levels four and five remain unchanged. The Medical Service of the long-term care insurance funds determines these classifications based on personal assessments. The government estimates that these adjustments to the assessment tool will yield savings of €1.3 billion by slowing the rise in the number of recognized beneficiaries. The draft notes that the actual growth in the number of people requiring care has far exceeded projected figures since the definition of care needs was redefined at the end of 2015, leading to what the government described as an “unchecked increase” in beneficiaries.
Another key provision in the draft eliminates funding for Care Level 1 relief benefits, which previously provided €131 in non-cash assistance for household tasks, accompaniment to medical appointments, or other caregiving support. This change is expected to save €800 million. The bill also promotes “care support services” intended to act as counseling centers for families providing home care. Approximately 5 million people in Germany, representing about 85 percent of those in need of care, are currently cared for at home. The government aims to strengthen this sector by supporting family caregivers, though critics argue that the proposed counseling services, which cost the state relatively little, do not compensate for the restriction of paid professional help.
Demographic and Financial Context
Mandatory long-term care insurance is a cornerstone of Germany’s social security system. According to the Health Minister, the number of people covered by this system has tripled over the last two decades to reach 20 million. Demographic shifts are expected to intensify pressure on the system; people aged 67 and over currently make up one-fifth of the population, a share projected to rise to one-quarter by 2035. In response to these trends, the bill mandates the creation of an expert commission to prepare a report on how to structurally strengthen the long-term care sector in the long term.
The reform has drawn sharp criticism from labor organizations, including the German Trade Union Federation, Verdi, and IG Metall. These unions argue that the measures exacerbate the crisis for care recipients and workers alike. They contend that the reform shifts the burden of care onto individuals and their families, particularly as out-of-pocket costs for nursing home stays have risen to an average of €3,500 per month nationwide. Unions state that the draft fails to address shortages in nursing staff or improve working conditions, instead focusing on cost containment that leaves many unable to afford necessary care.
The next step in the legislative process involves parliamentary debate and potential amendments. The bill must pass through the Bundestag and the Bundesrat before it can be enacted. The expert commission established by the draft will subsequently begin its work to analyze the structural sustainability of the sector, providing data that may influence future policy decisions regarding healthcare funding and labor standards in the care industry.
