The principle of the social state in the Federal Republic developed historically in particular from the social legislation of the German Empire under the Imperial Chancellor Otto von Bismarck. He planned to improve the situation of the workforce with a positive, state social policy and in this way repel the influence of social democracy. The first health insurance, accident insurance and a retirement and invalidity pension were therefore introduced in the 1880s under Bismarck’s leadership. At the same time social laws were also introduced in other countries. The Empire was characterised by an insurance system, in which almost the same contributions were demanded of employees and employers. The German social state is still based on this principle today.
The main aim of the modern social state is to help people in emergencies and actively prevent these emergencies from occurring if possible. The achievement of the latter is completed in many individual areas of policy and includes social policy itself as well as tax policy, employment market policy or education policy.
The range of benefits provided by the German social state can be divided into three categories: the welfare benefits, the retirement provisions and the insurance benefits. The welfare principle includes state assistance for citizens in need [...]. The state benefits for citizens who are either victims or have provided special service for the community come under the welfare benefits [...]. The insurance benefits are to cover a loss of income for example through age, unemployment, invalidity, illness, motherhood, dependency on care or the death of the breadwinner.
In addition, other fundamental principles characterise the German social state. For example, a large part of the population is obliged to take out insurance, i.e. they must be insured against certain risks [...].
Compulsory insurance is based on the principle of solidarity. Regardless of claiming the benefits, everyone who is insured pays into an insurance policy. This means that the people who have to claim more benefits, are safeguarded by the other members.
The contributions depend on the income of the insured. Only in the case of pension insurance is there the so-called equivalence principle, which states that the benefits depend on the contributions paid. In the other social insurance systems, the benefits are divided up through solidarity compensation and the risks are safeguarded.
(Extracts from “The German social state”. Source: http://www.bpb.de/politik/grundfragen/24-deutschland/40475/sozialstaat)
Author: Bundeszentrale für politische Bildung, www.bpb.de
Licence: Creative Commons by-nc-nd/3.0