With respect to the financing of social expenditure according to the European System of Integrated Social Protection Statistics (ESSPROS), more than one third of social expenditure is financed via employers’ social contributions (2019: 36%) and via general revenues from the federal government, by the Länder (federal provinces) and municipalities (36%) while more than one quarter is funded by social contributions from the protected persons themselves (27%). The proportion paid by employers has decreased during the reported years (all-time high 1992: 40%) and is about the same since 2009. The share borne by the government went down until 2001 (1980: 37%, 2001: 33%) while increasing afterwards moderately or rather heavily in 2009 and reaching almost its peak again in 2014, since then it is declining again. The financing proportion from the protected persons themselves was gradually growing (1980: 23%, 2005 and 2006: 27%) but has been lower again since the beginning of the financial and economic crisis in 2009 (about 26%), but went up again in 2014.
While just under one third of social protection systems, such as the federal long-term care allowance and child tax allowance, are financed exclusively by general government revenues, one quarter of the systems are financed either entirely (guaranteed remuneration by employers in the event of sickness) or primarily (occupational pension provision, occupational accident insurance, family burdens equalisation) by employers. At least two thirds (73%) of statutory pension insurance is financed by employers’ and employees’ social contributions.
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