Germany has approved the first stage of a major reform of its long term care insurance system, setting up important financial and benefit changes from 2027.
The federal cabinet approved the proposed Pflegeneuordnungsgesetz on Wednesday, September 30, following days of negotiations within the governing coalition. The legislation must still pass through the parliamentary process before becoming law.
The immediate objective is financial stability.
Germany's social long term care insurance system faces an expected funding gap of roughly €8 billion next year, while the number of people receiving care benefits has risen dramatically over the past two decades.
The package contains changes affecting contributions, care assessments, people with Pflegegrad 1, family caregivers and higher income workers.
For millions of Germans, the biggest question is simple: who will pay more in 2027?
Childless workers face higher contributions
One of the clearest changes affects people without children.
Germany's general long term care insurance contribution rate is planned to remain at 3.6 percent.
However, the additional contribution paid by childless members would increase by 0.3 percentage points, bringing the surcharge to 0.9 percent.
This means childless employees covered by the social long term care insurance system could see more money deducted from their income.
The measure is part of the government's effort to increase revenue without raising the general contribution rate for everyone.
Higher earners could also pay more
The reform would also change the income ceiling used to calculate long term care insurance contributions.
Currently, contributions are calculated on monthly income up to €5,812.50, equivalent to €69,750 annually.
Under the cabinet plan, the monthly contribution assessment ceiling would increase by €300.
People earning below the existing ceiling would not be affected by this particular change.
Those earning above it could pay additional contributions because a larger portion of their salary would become subject to long term care insurance.
A new charge for some insured spouses
Another change could affect households where a spouse or registered partner is covered through family insurance.
From next year, the government's plan introduces a contribution surcharge of 0.52 percent for certain jointly insured spouses or partners.
There would be exemptions, including for some caregivers and parents of children with disabilities.
The precise impact will therefore depend on individual household circumstances.
Minijobs would enter the care insurance system
Germany's widely used Minijob system is also included in the reform.
Under the proposal, Minijobs would become subject to long term care insurance contributions.
The government expects this measure alone to generate approximately €1.4 billion annually for the system.
This represents a significant change for a form of employment used by millions of workers in Germany.
Pflegegrad assessments are changing
Money is only one part of the reform.
Germany also plans to change the way people are assessed for different levels of care dependency.
The government says the assessment methodology will be adjusted so that Pflegegrad 1, Pflegegrad 2 and Pflegegrad 3 are assigned more precisely.
The details will matter enormously.
A person's Pflegegrad determines access to different benefits and services within Germany's long term care system.
The government has not yet provided complete operational details explaining exactly how future assessments will differ.
Importantly, people who already have an officially recognized Pflegegrad are expected to receive protection for their existing classification.
Pflegegrad 1 faces an important benefit change
One particularly significant proposal concerns people receiving Pflegegrad 1 who are cared for at home.
The monthly Entlastungsbetrag of €131 would be removed for this group under the current proposal.
The benefit is currently designed to help people requiring care and their families pay for recognized support services.
For households relying on that payment, its removal could therefore have a direct financial impact.
Family caregivers avoid one feared cut
Another proposal discussed before the cabinet agreement would have affected pension contributions for family caregivers.
That change did not make it into the agreed package.
Germany's long term care insurance system will continue paying full pension insurance contributions for qualifying relatives and other people providing unpaid care.
This matters because people caring for relatives frequently reduce their working hours or leave employment temporarily.
Pension contributions help limit the long term impact that caregiving can have on their retirement entitlement.
Germany wants more prevention before people need care
The reform also puts greater emphasis on preventing or delaying the need for long term care.
Under the principle described as "Reha statt Pflege," rehabilitation should be considered more systematically before a person becomes dependent on permanent care services.
People aged 60 and older would receive access to a preventive examination known as Check up 60+.
The objective is to identify health risks earlier and help older adults maintain independence for longer.
Authorities would also examine more consistently whether rehabilitation could reduce someone's need for care.
Emergency short term care is planned
Germany also wants to improve support when families suddenly face a care emergency.
From 2028, the reform envisages dedicated emergency short term care capacity.
The government also plans a temporary funding mechanism for emergency services in outpatient care and fully residential short term care.
Families with children requiring care would receive additional targeted support.
A new local support budget of up to €300 per month, approximately €3,600 annually, is planned for qualifying families with care dependent children.
Why Germany is reforming care now
The financial pressure behind the reform is substantial.
Around 1.95 million people received benefits from Germany's long term care insurance system in 2005.
By 2025, that number had increased to roughly six million.
Spending increased alongside it.
Long term care insurance expenditure rose from approximately €17 billion in 2005 to €70.4 billion in 2025.
Germany's aging population means the number of people needing assistance is expected to remain a major financial challenge.
At the same time, fewer contributors are supporting each benefit recipient.
In 1998 there were approximately 29 contributors for every person receiving care insurance benefits.
By 2025, that ratio had fallen to about 10 contributors for each recipient.
The financial gap remains enormous
The current package is intended to stabilize the system, but it does not eliminate Germany's long term care financing problem.
The statutory health and care insurance association expects the system to record a deficit of about €4.4 billion this year.
Without further measures, the shortfall could rise to around €7.5 billion in 2027.
Separate reporting on the cabinet proposal indicates that the Health Ministry expects a 2027 deficit of approximately €7.6 billion even as the legislation seeks billions in financial relief.
This is why Wednesday's decision should not be viewed as the final German care reform.
It is the first stage.
The bigger reform is coming in 2027
Several of the most controversial questions were left unresolved.
A new commission is expected to examine deeper structural changes to Germany's care system.
The government wants proposals early in 2027, with the objective of moving another reform through the cabinet around Easter and potentially bringing structural changes into effect from July 1, 2027.
One issue that remains unresolved is whether Germany should introduce a cap on the amount nursing home residents must personally pay.
The SPD had pushed for such a mechanism during negotiations, but it was not included in the cabinet package.
The relationship between private and social long term care insurance also remains part of the wider debate.
Nursing home costs remain a major issue
For families, the financing debate is not abstract.
People living in German nursing homes can face substantial personal costs that are not fully covered by long term care insurance.
Proposals to limit those personal contributions have therefore become one of the central political questions surrounding the next stage of reform.
The government has not yet settled on a final model.
That means households should distinguish between measures contained in the current cabinet approved bill and ideas still being considered for the broader 2027 structural reform.
Germany also faces a shortage of caregivers
Money is not the only challenge.
Germany's aging population is increasing demand for professional care at the same time as the country struggles to recruit enough workers.
According to figures cited by Tagesschau from the German Nursing Council, Germany could face a shortage of as many as 500,000 care workers by 2034.
Any long term solution therefore has to address both financing and staffing.
Simply raising additional revenue would not automatically create the workforce required to care for a rapidly growing elderly population.
What happens next?
The cabinet decision is an important step, but the legislation has not completed the German legislative process.
The bill must now proceed through parliament.
That means individual provisions could still change before the legislation ultimately takes effect.
For households, several points are already clear from the government's current proposal.
Childless contributors face a higher surcharge. Some higher earners would contribute more. Minijobs would become subject to care insurance contributions. Assessment rules would change. Some Pflegegrad 1 recipients could lose the €131 monthly relief payment.
At the same time, family caregivers retain important pension protection, and the government is promising additional preventive and emergency care measures.
The larger question, how Germany will sustainably finance care for an aging population over the next decade, remains unresolved.
That debate will continue into 2027.
