EUROMOD country report : Germany : 2021-2024.
Date: 2025-04-15
Institutions: Joint Research Centre
Subjects: Germany, household income, living conditions, maintenance, poverty, report, simulation, software, statistics, tax reform

EUROMOD Country Report - Germany 

2021-2024 

Lay, M. 
Editors: Maier, S., Ivaškaitė-Tamošiūnė, V. 

2025 

This publication is an External Study report prepared for the Joint Research Centre (JRC), the European Commission’s 
science and knowledge service. It aims to provide evidence-based scientific support to the European policymaking 
process. The contents of this publication do not necessarily reflect the position or opinion of the European Commission. 
Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that 
might be made of this publication. For information on the methodology and quality underlying the data used in this 
publication for which the source is neither Eurostat nor other Commission services, users should contact the referenced 
source. The designations employed and the presentation of material on the maps do not imply the expression of any 
opinion whatsoever on the part of the European Union concerning the legal status of any country, territory, city or area or 
of its authorities, or concerning the delimitation of its frontiers or boundaries. 

Contact information 
Name: JRC-EUROMOD Team 
Address: Edificio EXPO, c/ Inca Garcilaso 3, 41092 Sevilla, Spain 
Email: jrc-euromod@ec.europa.eu  
https://euromod-web.jrc.ec.europa.eu/  

EU Science Hub 
https://joint-research-centre.ec.europa.eu 

JRC141173 

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ISBN 978-92-68-25033-4   doi:10.2760/7419827  

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Luxembourg: Publications Office of the European Union, 2025 

© European Union, 2025  

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How to cite this report: European Commission: Joint Research Centre, Lay, M., EUROMOD Country Report - Germany, Maier, S. and Ivaškaitė-
Tamošiūnė, V. editor(s), Publications Office, Luxembourg, 2025, https://data.europa.eu/doi/10.2760/7419827, JRC141173. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROMOD  is  the  tax-benefit  microsimulation  model  for  the  European  Union  (EU).  It  enables 
researchers and policy analysts to calculate, in a comparable manner, the effects of taxes and benefits 
on household incomes and work incentives for the population of each country and for the EU as a 
whole. 

EUROMOD covers the 27 Member States and is yearly updated to cover the most recent changes in 
countries’ policy systems. It uses input databases which are also updated on a yearly basis, coming 
mainly  from  the  European  Union  Statistics  on  Income  and  Living  Conditions  (EU-SILC)  and 
Household  Budget  Surveys  (HBS).  The  model  yearly  update  is  supported  by  the  following 
Directorate-Generals  of  the  European  Commission:  DG  EMPL,  DG  ECFIN,  DG  TAXUD,  DG 
REFORM, DG JRC, DG ESTAT. 

Originally maintained, developed and managed by the Institute for Social and Economic Research 
(ISER), since 2021 these responsibilities are taken over by the Joint Research Centre (JRC) of the 
European Commission, in collaboration with Eurostat and 27 national teams from the EU countries. 

The EUROMOD governance structure consists of a Steering Committee, allowing partner DGs to 
monitor the process of the EUROMOD update, and a Scientific Advisory Board to monitor and guide 
the scientific development of the model. 

This report documents the work done in the most recent annual update for Belgium. This work was 
carried out by the EUROMOD core development team, based at the JRC in Seville, in collaboration 
with the national team. 

JRC B2 head of unit: Salvador Barrios 

EUROMOD project leader: Fidel Picos 

EUROMOD coordination assistant: Marta Jędrych 

EUROMOD software developers: Kostas Manios, Bianey Palma, Hannes Serruys 

EUROMOD developer responsible for Germany: Sofia Maier, Viginta Ivaškaitė-Tamošiūnė 

National team for Germany: Max Lay, Mathias Dolls, Andreas Peichl. The results presented in this 
report are derived using EUROMOD version J1.0+. EUROMOD is continually being improved and 
the results presented here may not match those that would be obtained with earlier or later versions 
of EUROMOD.  

EUROMOD documentation: https://euromod-web.jrc.ec.europa.eu/resources/documentation 

Glossary of EUROMOD terms: https://euromod-web.jrc.ec.europa.eu/resources/glossary   

Policy parameters used in EUROMOD: https://euromod-web.jrc.ec.europa.eu/resources/parameters 

1EUROMOD Country Report – GERMANY 

CONTENTS 

1.  BASIC INFORMATION _____________________________________________________ 5 

1.1 

1.2 

1.2.1 
1.2.2 
1.2.3 
1.2.4 
1.2.5 

1.3 

1.4 

1.4.1 
1.4.2 

Basic information about the tax-benefit system ___________________________ 5 

Social Benefits ______________________________________________________ 6 
Benefits from Statutory Unemployment Insurance _____________________________ 7 
Benefits from Statutory Health and Accident Insurance _________________________ 8 
Benefits from Statutory Pension Insurance ___________________________________ 9 
Pensions from Other Institutions: _________________________________________ 11 
Public Transfers to Private Households  ____________________________________ 11 

Social contributions  ________________________________________________ 14 

Taxes  ____________________________________________________________ 15 
Direct Taxes _________________________________________________________ 15 
Indirect Taxes ________________________________________________________ 16 

SIMULATION OF TAXES, SOCIAL INSURANCE CONTRIBUTIONS AND BENEFITS IN 

2. 
EUROMOD  _______________________________________________________________ 17 

2.1 

2.1.1 

Scope of simulation _________________________________________________ 17 
Partially simulated tax-benefit components  _________________________________ 21 

2.2  Main policy changes [2021 –2024] _____________________________________ 22 

2.3 

2.4 

2.5 

Order of simulation and interdependencies _____________________________ 22 

Policy extensions ___________________________________________________ 25 

Benefits ___________________________________________________________ 26 
Child Benefits (bch00_de)  ______________________________________________ 26 
Unemployment Benefits I (bunct_de) ______________________________________ 27 
Disability Pension from the Statutory Accident Insurance (pdiss_de) _____________ 29 
Education Benefits (bed_de) _____________________________________________ 30 
Long-Term Care Benefits from Statutory Accident Insurance (pdiac_de) __________ 32 
Sickness Benefits (bhl_de) ______________________________________________ 32 
Citizen’s benefit and Social Benefits (bunnc_de and bsaot_de) __________________ 33 
Maternity Leave Benefits (bmact_de) ______________________________________ 36 
Parental Leave Benefits (bplct_de) ________________________________________ 38 
Housing benefits (bho00_de) ____________________________________________ 39 
Social Assistance for Old-age and for Reduced Work Ability (bsaoa_de) __________ 41 
General Social Assistance (bsa00_de) _____________________________________ 43 
Additional Child Benefits (bchot_de) ______________________________________ 44 
Educational Allowance for School Material (bched_de)  _______________________ 46 
Wage Compensation Scheme (bwkmcee_de) ________________________________ 47 

2.5.1 
2.5.2 
2.5.3 
2.5.4 
2.5.5 
2.5.6 
2.5.7 
2.5.8 
2.5.9 
2.5.10 
2.5.11 
2.5.12 
2.5.13 
2.5.14 
2.5.15 

2.6 

Extraordinary measures _____________________________________________ 48 

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EUROMOD Country Report – GERMANY 

2.6.1 
2.6.2 
2.6.3 
2.6.4 
2.6.5 
2.6.6 

Covid-related one-off child bonus (bencovidch_de) ___________________________ 48 
Covid-related one-off benefit for the self-employed (bencovidse_de) _____________ 48 
Heating bonus (bhtxp_de) _______________________________________________ 49 
Lump-sum energy transfer (blsxp_de) _____________________________________ 50 
One-off payments for unemployed and recipients of social assistance (bsaxp_de)  ___ 50 
Lump-sum energy transfer for students (blsxpsd_de) __________________________ 51 

2.7 

2.7.1 
2.7.2 
2.7.3 
2.7.4 
2.7.5 

Social insurance contributions ________________________________________ 52 
Employer Social Contributions (tscer_de) __________________________________ 55 
Employee Social Contributions (tscee_de) __________________________________ 56 
Self-Employed Social Contributions (tscse_de) ______________________________ 57 
Pensioner Social Contributions (tscpe_de) __________________________________ 58 
Other Social Contributions (tscot_de) ______________________________________ 59 

2.8 

2.8.1 
2.8.2 
2.8.3 
2.8.4 

Direct taxes  _______________________________________________________ 60 
Taxable Income (tin_de) ________________________________________________ 60 
Individual Taxation (tinit_de) ____________________________________________ 64 
Joint Taxation (tinjt_de) ________________________________________________ 67 
Capital Income Taxation (tinkt_de)  _______________________________________ 69 

2.9 

2.9.1 
2.9.2 

Consumption taxes _________________________________________________ 70 
VAT (il_tva) _________________________________________________________ 71 
Specific excises (il_txa)  ________________________________________________ 71 

3.  DATA _________________________________________________________________ 74 

3.1 

3.2 

3.3 

3.3.1 
3.3.2 
3.3.3 
3.3.4 
3.3.5 
3.3.6 

General description_________________________________________________ 74 

Data adjustment ___________________________________________________ 75 

Imputations and assumptions  ________________________________________ 75 
Time period __________________________________________________________ 75 
Gross incomes ________________________________________________________ 76 
Disaggregation of harmonized variables ____________________________________ 77 
Approximation of Benefit Entitlement Basis ________________________________ 82 
Imputation of Tax Deductions/Allowances  _________________________________ 83 
Other Imputed Variables ________________________________________________ 83 

3.4 

Updating  _________________________________________________________ 83 

3.5 
Extended input data (with household expenditures for the simulation of 
consumption taxes)  _______________________________________________________ 84 

4.  VALIDATION OF INPUT DATASET BASED ON EU-SILC 2022 _____________________ 86 

4.1 

4.1.1 
4.1.2 
4.1.3 

Aggregate Validation _______________________________________________ 86 
Components of disposable income ________________________________________ 86 
Validation of market income  ____________________________________________ 87 
Validation of taxes and social insurance contributions _________________________ 88 

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EUROMOD Country Report – GERMANY 

4.1.4 

Validation of Benefits __________________________________________________ 89 

4.2 

4.2.1 
4.2.2 

Income distribution_________________________________________________ 90 
Income inequality _____________________________________________________ 90 
Poverty rates _________________________________________________________ 91 

4.3  Macrovalidation of consumption taxes _________________________________ 91 

5. 

SUMMARY OF “HEALTH WARNINGS”  _______________________________________ 92 

6.  REFERENCES ___________________________________________________________ 93 

ANNEX 1. UPRATING FACTORS  ________________________________________________ 95 

ANNEX 2. POLICY EFFECTS IN 2023-2024 ________________________________________ 99 

ANNEX 3. VALIDATION TABLES _______________________________________________ 102 

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EUROMOD Country Report – GERMANY 

1.  BASIC INFORMATION 

1.1  Basic information about the tax-benefit system  

the 

•  The German fiscal budget consists of three major single funds, i.e. the budget of the state 
(“Bund”), the budget of the federal states (“Länder”), and the budget of the municipalities 
(“Gemeinden”).  Furthermore, 
system 
the  budget  of 
(“Sozialversicherungen”) is sometimes subsumed under the fiscal budget. Generally, tax 
and  benefit  rules  may  vary  over  the  three  main  levels,  “Bund”,  “Länder”,  and 
“Gemeinden”.  Some  taxes  are  levied  by  one  of  the  three  administrative  units  alone, 
whereas other taxes are shared. However, with respect to tax and benefits rules as well as 
rates,  the  German  tax  and  benefit  system  is  a  largely  unified,  national  system.  Some 
exceptions can be found among the taxes. The tax rate for church taxes  varies slightly 
over  the  Länder.  At  the  local  business  tax  as  well  as  the  property  tax,  tax  rates  vary 
significantly between municipalities, as the local jurisdictions levy their own multipliers. 
Tax rates for the real property acquisition tax vary over the “Länder”. 

insurance 

social 

• 

In  Germany, the fiscal year for taxes and benefits runs from 1st of January to 31st of 
December. This is usually the time when changes in taxes or benefits apply. However, 
the current pension value is adjusted annually on 1st of July. 

•  The statutory pension age in Germany is 65. This age will be gradually increased, for 
entry into old-age pension between 2012 and 2031, by one month each year, so that the 
statutory pension age will be 67 in 2031. Generally, entering retirement earlier is only 
possible  with  reduction  in  the  pension  level.  This  used  to  be  different  for  women 
(“Altersrente  für  Frauen”).  However,  since  2004,  there  is  no  possibility  anymore  for 
women – as it is for men -- to enter retirement earlier, without accepting reductions. 

•  Students in Germany may leave secondary schools with a general-school-leaving degree 
at the age of 15 if they attended school for at least nine years. The Youth Employment 
Protection Act (“Jugendarbeitsschutzgesetz”) settles the minimum employment age at 15. 
However, till the age of 18, school leavers are obliged to pursue secondary education in 
the framework of vocational training or apprenticeships, at least on a part-time basis. 

•  The definition of dependent children that is most commonly applied in the German tax 
and  transfer  system  relates  to  the  definition  in  the  context  of  child  benefits 
(“Kindergeld”).  According  to  these  regulations,  dependent  children  are  biological, 
adopted, or foster children, aged 18 or younger, who live in the same household with their 
parents. They can at maximum be aged 25 in case they are still in tertiary education and 
do not work more than 20 hours a week on average. This definition may differ depending 
on the benefit to be considered. 

•  Lone parents are generally eligible to a household allowance for single parents in German 
income taxation law. Single parents, in this context, are not married and not widows or 
widowers. They must be living in a household together with a dependent child which is 
eligible for child benefits and actually belongs to the household. No other adult person – 
not even a grandparent -- is allowed to live in this household. Parents may though prove 
that they do not pool money with other adults in the household. Only the parent who is 
eligible to the allowance can receive it and it cannot be assigned to the other parent in any 
case. 

•  Generally, individuals are taxed individually in German income tax law. Married couples 
are assessed to joint taxation in the form of full income splitting. Taxable income of the 

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EUROMOD Country Report – GERMANY 

spouses is added up, the tax schedule is applied to half of this sum, and the resulting tax 
burden is doubled. 

income 

•  A  specific  element  of  German 

the  progression  clause 
(Progressionsvorbehalt). This is relevant for some types of income which are not directly 
subject to income tax, e.g. unemployment benefits I. Even though these incomes are not 
included in the tax base, they are included in the base used to determine the tax bracket 
of the progressive income tax schedule. This way these incomes may increase the income 
tax rate used for the other income sources which are subject to the income tax. 

law 

tax 

is 

•  There is a final withholding tax on capital income (“Abgeltungssteuer”), which consists 
of a flat tax rate of 25% on capital income exceeding an allowance that is collected at 
source. 

•  Taxes on income from dependent employment are collected at source, i.e. directly at the 
employer every month, in the form of pay-roll tax (“Lohnsteuer”). Monthly income is 
also the reference figure for most of the means-tested benefits in German benefit law. 
Usually, a past time frame of three to 24 months is applied, where monthly income may 
not exceed specific thresholds, on average. As pay-roll taxes are not final in Germany, it 
is  common  to  file  income  tax returns  to apply  tax  allowances and  deductions. This is 
usually done altogether at the end of the year (or even in the following year). 

•  There is no statutory indexation of the tax schedules to inflation in general in Germany. 
However,  two  reports  are  crucial  for  updating  the  tax  schedule  every  two  years:  the 
minimum subsistence level report and the tax progression report. The first one forecasts 
the tax-free subsistence level, that is relevant for the basic tax-free allowance and child 
tax  allowance  for  the  following  two  years.  The  tax  progression  report  estimates  the 
additional tax revenues due to ‘cold progression’ in the previous two years. Tax brackets 
are  then  usually  updated  for  the  following  two  years  based  on  the  price  forecast  of 
households’ consumption expenditure. 

•  The current pension value (“Rentenwert”), which represents the current old-age pension 
claims for one year of average contributions and determines the basis for the level of old-
age pensions, is adjusted annually according to the growth rate of gross earnings from 
dependent  employees.  The  basic  benefit  rate  for  citizen’s  benefit  (formerly  citizen’s 
benefit) and social assistance is adjusted annually through an inflation index calculated 
for a basket of goods and services which are determined by law to be necessary to cover 
basic needs. From 2023 on, the adjustment of the basic benefit rate is complemented by 
a forward-looking element to compensate for future price development. 

•  Consumption taxes consist of (1) VAT with two rates (standard 19 % and reduced 7 %), 
(2) harmonised excises on tobacco, alcohol (split up between different kinds of alcoholic 
beverages), energy and electricity, and (3) excise on coffee. 

•  The policy parameters saved as constants in the model and their values for the most recent 

year are available at https://euromod-web.jrc.ec.europa.eu/resources/parameters.  

1.2  Social Benefits 

Social benefits are grouped into benefits from the statutory unemployment insurance, the statutory 
health and accident insurances, the statutory pension insurance, and public transfers to private 
households. 

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EUROMOD Country Report – GERMANY 

1.2.1  Benefits from Statutory Unemployment Insurance 

Unemployment Benefits I (Arbeitslosengeld I): Unemployed individuals, under the age of 65, 
who are generally able to work at least 15 hours per week, are entitled to “unemployment benefits 
I” in case they paid contributions to the unemployment insurance for at least 12 months within 
the  two  years  preceding  the  unemployment  spell.  “Unemployment  benefits  I”  are  non-means-
tested benefits. They amount to 60% of previous net earnings for childless individuals and to 67% 
for individuals with at least one child in terms of income tax law. Recipients are allowed to work 
up to 15 hours per week to top up benefits. The duration of entitlement to “unemployment benefits 
I” depends on the individual’s age and number of months contributions were made in the previous 
5 years. Unemployment benefits are subject to progression clause in income taxation (see Table 
2.18). 

(Kurzarbeitergeld):  Employees 

Short-Term  Work  Compensations 
the 
unemployment insurance are eligible to short-term work compensations in case their employers 
temporarily apply for short-term work due to business cycle effects or global economic downturn. 
In this case, 60% of the forgone net earnings are paid by the unemployment insurance (67% for 
employees with at least one child), usually for a time of up to twelve months. This time frame 
may be extended up to 24 months. Contributions to statutory social insurances are also paid for. 
Short-term work compensations are subject to progression clause in income taxation (see Table 
2.18). 

insured  by 

Transfer Short-Term Work Compensations  (Transferkurzarbeitergeld): Transfer short-term 
work compensations are a special form of short-term work compensations. Employees generally 
eligible to short-term work compensations are entitled to transfer short-term work compensations 
in case their employers apply measures of operational restructuring, in turn of which the employee 
is endangered to become unemployed. Transfer short-term work compensations are paid for a 
time of up to 12 months, and levels correspond to the regulations for general short-term work 
compensations. They are subject to progression clause in income taxation (see Table 2.18). 

Seasonal Short-Term Work Compensations (Saison-Kurzarbeitergeld, formerly Wintergeld or 
Winterausfallgeld): Seasonal short-term work compensations are supposed to foster employment 
in  the  construction  sector  during  winter  time.  Employees  in  the  construction  sector  who  are 
unemployed during the months between December and March are generally entitled to seasonal 
short-term work compensations. The level of benefits corresponds to the level of general short-
term work compensations. They are subject to progression clause in income taxation (see Table 
2.18). 

Insolvency  Benefits  (Insolvenzgeld):  Employees  insured  in  the  unemployment  insurance  are 
eligible  to  insolvency  benefits  in  case  their  employers  become  insolvent.  In  this  case,  the 
unemployment insurance pays the employees’ net earnings – up to the contribution assessment 
threshold  from  the  statutory  pension  insurance  –  for  a  time  of  three  months  following  the 
insolvency. The benefit is financed by the unemployment insurance and by the employer who has 
to pay a special levy for insolvency (Insolvenzumlage). Since 2009 the levy has to be paid to the 
statutory  health  insurance.  Insolvency  benefits  are  subject  to  progression  clause  in  income 
taxation (see Table 2.18). 

Unemployment  Benefits  for  Part-Time  Unemployment  (Teilarbeitslosengeld):  Individuals 
who are working part-time in more than one job and lose less than all of their jobs are entitled to 
“unemployment benefits for part-time unemployment” if they have contributed to the statutory 
unemployment insurance for at least 12 months on all of their jobs. Benefits are paid for up to six 
months and levels correspond to the “unemployment benefits I”. They are subject to progression 
clause in income taxation (see Table 2.18). 

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EUROMOD Country Report – GERMANY 

Benefits  for  Early  Retirement  (Vorruhestandsgeld,  Altersteilzeitzuschläge):  Employees  may 
negotiate with their employers that they work part-time, i.e. 50% of their usual hours, from the 
age of 55 onwards. This can be implemented either continuously or blocked in years of full and 
zero hours. In this case, part-time earnings are increased by 20% in the form of benefits for early 
retirement, which are paid by the unemployment insurance provided that employees entered this 
arrangement before the end of 2009 and that the employer hires an additional employee to cover 
for the recipient of early retirement benefits. Otherwise, the employer has to pay for the benefits. 
Benefits for early retirement are income tax exempt, but they are subject to progressive taxation 
(see Table 2.18). 

Benefit for Business Start-ups (Gründungszuschuss: Förderung der Existenzgründung, Ich-AG 
und Überbrückungsgeld): Recipients of unemployment benefits who start a business and become 
self-employed are eligible to business start-ups benefit during the first months following the start-
up. Employment agencies pay benefits amounting to the level of previous unemployment benefits 
and a monthly lump-sum of 300 Euro for 6 months. The time frame for the lump-sum transfer 
may be extended up to 15 months if the business proves to be viable. Benefits are tax-free and not 
subject to progression clause in income taxation. 

Benefits for Re-training (Umschulungszuschüsse, Bildungsgutschein): Unemployed individuals 
are generally eligible to re-training benefits, paid for by employment agencies, while they receive 
unemployment  benefits  I  (or  citizen’s  benefit  or  if  they  are  threatened  by  unemployment). 
Benefits for re-training cover travel expenses, costs for overnight accommodations, meals, and 
child care costs. For the period of the funded training, recipients generally remain eligible for 
unemployment benefits I. However, rules for unemployment benefits, such as the frequency in 
which applications must be filed, remain unchanged during the training. 

1.2.2  Benefits from Statutory Health and Accident Insurance 

Maternity-Leave Benefits (Mutterschaftsgeld): All mothers who are employed and insured by 
the  statutory  health  insurance,  at  the  time  when  they  go  on  maternity  leave,  are  eligible  to 
maternity-leave  benefits.  Maternity-leave  benefits  are  paid  by  the  statutory  health  insurance 
system for six weeks before the child’s birth and eight weeks thereafter (time of maternity leave) 
in order to compensate foregone income from employment. Benefits are reduced if employment 
was less than full time. The remaining gap between maternity-leave benefits and the previous net 
labour income must be closed by the employer at the time of maternity leave. Maternity-leave 
benefits are subject to progression clause in income taxation (see Table 2.18). 

Sickness  Benefits  (Krankengeld  der  gesetzlichen  sowie  der  privaten  Pflegezusatz-  oder 
Krankentagegeldversicherung):  All  individuals  insured  by  the  statutory  health  insurance  are 
entitled  to  sickness  benefits.  These  are  generally  employees  and  recipients  of  unemployment 
benefits  I,  not  however  recipients  of  citizen’s  benefit.  In  case  sickness  prevents  them  from 
working, generally the employer is obliged to continue salary payment for a time of six weeks. 
Only after these six weeks, sickness benefits are paid for by the statutory health insurance. They 
generally amount to 70% of the previous gross earnings and at a maximum to 90% of previous 
net earnings. Social security contributions are subtracted from the benefit level, like from regular 
earnings -- however, only contributions to pension, long-term care, and unemployment insurance. 
Employer  contributions  are  covered  by  the  health  insurance.  In  case  of  unemployed,  where 
benefits are paid based on unemployment benefits I receipt, the health insurance covers also the 
employee social contributions. 

Sickness benefits are paid for a time of up to 78 weeks for a specific illness. They are paid for a 
time of generally up to ten days if parents need to stay at home to care for their sick children 
(sickness benefits for care of sick children). Since January 2009, self-employed are only eligible 
to sickness benefit if they contribute to an additional health insurance, explicitly covering sickness 

8 

 
 
EUROMOD Country Report – GERMANY 

benefits.  Sickness  Benefits  are  subject  to  progression  clause  in  income  taxation  (see  above). 
Individuals insured by private health insurance, may in addition contribute to an insurance that 
pays sickness benefits from private long-term care insurance or daily sickness allowances from 
private health insurances. 

Injury Benefits (Verletztengeld): Injury benefits are paid to employees who are insured by the 
statutory accident insurance and who are physically or mentally unable to pursue his work due to 
therapies or curative medical treatments that are related to an accident at work. During the first 
six weeks of sick leave, the employer is obliged to continue salary payment. After that, injury 
benefits are paid for up to 78 weeks. They amount to 80% of the previous foregone gross earnings 
and at maximum 100% of net earnings. Injury benefits are income tax exempt, but they are subject 
to progressive taxation. Moreover, regulations for the sickness benefits apply. Injury benefits are 
subject to progression clause in income taxation (see above). 

Sickness Benefits for Military People (Versorgungskrankengeld): Sickness benefits for military 
people are paid to military people in case they get injured while pursuing military services. They 
amount to 80% of the previous foregone gross earnings and at maximum 100% of net earnings. 
Sickness benefits for military people are subject to progression clause in income taxation (see 
Table 2.18). 

Severance  Benefits  (Übergangsgeld):  Severance  benefits  are  paid  to  heavily  injured  or 
physically or mentally disabled people who can temporarily not pursue full-time employment due 
to vocational further training or other measures of reintegration into the labour market. Recipients 
need to have contributed to the statutory unemployment insurance for at least 12 months in the 
previous 3 years. Benefits generally amount to about 68% of previous net earnings. In case of 
children eligible to child benefits in the household, benefits amount to 75% of net earnings. In 
case  of self-employment  the  benefit amounts to  80%  of last  year’s underlying  income  for the 
annual  contribution.  They  are  paid  for  up  to  three  months.  Severance  benefits  are  subject  to 
progression clause in income taxation (see Table 2.18). 

Long-term  Care  Benefits  (Pflegegeld):  Long-term  care  benefits  can  be  paid  by  the  statutory 
accident insurance as well as the statutory long-term care insurance. If individuals insured in the 
statutory accident insurance are so helpless in consequence of the insured event that they require 
a considerable support for the common and recurring tasks in the course of daily life, long-term 
care benefits are paid and a nurse or home care is provided. Benefits from the statutory long-term 
care insurance  are provided if eligibility does not stem from occupational illness or disability, 
mostly  age-related.  The  concrete  monthly  amount  of  the  benefit  is  determined  by  taking  into 
account the nature or severity of health damage and the extent of assistance required. 

Pensions from the Statutory Accident Insurance (Rente der gesetzlichen Unfallversicherung): 
Individuals insured in the statutory accident insurance are eligible to pensions if consequences of 
an  accident  are  severe.  Consequences  of  an  accident  are  considered  severe  if  they  reduce  the 
individual’s earnings capacity by at least 20 %. In case of a loss of the entire earnings capacity, a 
pension is paid that amounts to two thirds of annual individual earnings. 

Pensions for Disability to Work for Civil Servants (Pension aufgrund von Dienstunfähigkeit): 
If a civil servant becomes unable to work and then retires as a consequence of an accident at work, 
he receives a pension for disability to work. Benefit levels depend on prior earnings and prior 
work history as a civil servant. 

1.2.3  Benefits from Statutory Pension Insurance 

Old-Age Pensions (Altersrente): Individuals who contributed to the statutory pension insurance 
for at least five years are entitled to the regular old-age pensions from the age of 65 on. This 

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regular age for entry into old-age pension is gradually increasing for the younger cohorts up to 
67,  which  will  be  the  regular  age  in  the  year  2031.  There  are  a  few  specific  old-age  pension 
schemes,  in  which  entitlement  may  start  some  years  earlier,  e.g.  severe  disabilities  or 
unemployment  so  that  actual  entries  into  old-age  pensions  may  vary  considerably  over  the 
individuals. The level of old-age pensions is determined individually by the contributions made, 
the age of entry into pension, and the current pension value. 

In  the  course  of  the  Retirement  Income  Act  in  2005,  taxation  rules  for  income  from  old-age 
pensions  were  altered.  Taxation  of  old-age  pension  income  is  gradually  shifted  to  deferred 
taxation. While in 2009, the taxable fraction of old-age pensions amounts to 58% (so that 42% 
are tax free), it gradually increases every year, until it reaches 100% in the year 2040. At the same 
time,  allowances  to  deduct  contributions  to  old-age  pension  schemes  from  labour  income  are 
gradually increased in turn and are fully deductible from 2023 on.  

Pensions  for  Reduced  Ability  to  Work  (Erwerbsminderungsrente,  Berufsunfähigkeitsrente, 
formerly  also  Erwerbsunfähigkeitsrente):  Pensions  for  reduced  ability  to  work  are  paid  to 
individuals who are insured in the statutory pension insurance and contributed at least five years, 
if their ability to work – any kind of work -- is permanently reduced. An individual’s ability to 
work is considered permanently reduced if the individual is not able to work more than six hours 
per day anymore. If the individual is able to work more than three hours a day but not more than 
six, the individual’s ability to work is considered partly reduced. It is considered fully reduced if 
the individual is not able to work three hours per day. According to the regulations for the regular 
old-age pension, the amount of pensions for reduced ability to work is determined individually 
by the contributions made, the age of entry into pension, and the current pension value. Recipients 
may have earnings from employment in addition up to limits that vary for partly and fully reduced 
abilities to work. 

Survivor’s (Widow’s and Orphan’s) Pensions (Hinterbliebenenrente, including Witwenrente 
and Waisenrente): Survivor’s pensions include pensions for widows/widowers and pensions for 
orphans.  There  is  a  regular  pension  for  widows  and  an  extended  one.  The  regular  widow’s 
pensions  are  paid  to  the  surviving  partner  if  the  deceased  person  contributed  to  the  statutory 
pension insurance for at least five years. Orphan’s pensions are distinguished between orphans 
who lost one parent and orphans who lost both parents. Orphans who lost one parent who was 
insured  in  the  statutory  pension  insurance  receive  10%  of  the  pension  claims  of  the  deceased 
parent. Orphans who lost both parents receive 20% of the average pension claims of both parents. 
Orphan’s pensions are generally paid up to age 18. They can be prolonged up to a maximum age 
of 27 in case the orphan is disabled or in higher education. 

Child-Care Pensions (Erziehungsrente): Child-care pensions are paid to divorced spouses upon 
the  death  of  their  ex-partner  and  widows/  widowers  who  contributed  to  the  statutory  pension 
insurance for at least five years, who did not marry again, and who care for a child younger than 
18. There are differences in entitlements between East- and West-Germany according to the date 
of divorce. Child-care pensions are paid up to the 18th birthday of the child. They amount to the 
levels of a pension for fully reduced ability to work, where claims of the surviving person are 
relevant. Regulations for additional earnings from employment apply accordingly. 

Supplementary Pension for Employees in Public Service (Rente der Zusatzversorgungskassen 
des öffentlichen Dienstes): The additional supply of pensions for employees in public service is 
related to the retirement system and provides a supplementary pension measure for employees in 
public services. Since January 2002 this kind of pension system was transferred to an employer 
pension scheme model, where the amount of the pension and the contributions comply with the 
“law to improve the occupational pension” ("Riester-Law II "). Contributions are paid directly 
out of gross income by the employer. They are determined by the relationship between the insured 
income and reference income and an age factor. 

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1.2.4  Pensions from Other Institutions: 

Pensions from Employer Schemes (Werks- und Betriebsrenten): Employers voluntarily provide 
their employees, not necessarily all of them, with pensions from employer schemes, in case of 
retirement,  disability  or  death. Typical  recipients  are employees,  workers,  or  managers.  If  the 
employer commits to paying pensions from employer schemes this can be explicitly agreed upon 
in  individual  work  contracts  or  in  collective  agreement  contracts.  Benefits  can  be  paid  on  a 
regular, or an irregular basis, typically to pension funds. 

Old-Age Pensions for Civil Servants (Pension, Altersruhegehalt): The old-age pension for civil 
servants is paid to officials, judges, soldiers and priests, church officials and other persons who 
are  in  civil  servants,  when  they  reach  retirement  age.  The  regular  age  for  entry  into  old-age 
pension for civil servants is 65, as in the statutory old-age pension insurance. It will equally be 
increased gradually in the future. A  retired civil servant  is eligible to the old-age pension if a 
period  of  at  least  five  years  of  service  is  completed.  The  amount  of  the  pension  depends  on 
employment status (full- or part-time employment) and position of the individual in the public 
service (mittlerer Dienst, gehobener Dienst, höherer Dienst). 

Pension  Schemes  for  Self-Employed,  Freelancers,  and  Farmers  (Rente  berufsständischer 
Versorgungswerke, landwirtschaftlicher Alterskassen und Landabgaberenten) and Supplements 
to Old-age Pension Insurance Contributions for Farmers (Zuschüsse der landwirtschaftlichen 
Alterskassen):  Pension  schemes  for  self-employed  are  based  on  a  statutory  compulsory 
membership for certain groups of free-lancers and they offer their members retirement, disability 
and survivors’ benefits, which are contribution-based. Agricultural entrepreneurs, farmers, and 
their family members are insured in the pension schemes for farmers. The contribution scheme 
for farmers is similar to that of the statutory pension insurance. 

Old-age  Pensions  from  Foreign  Countries  (Auslandsrente):  These  pensions  refer  to  income 
from pension systems from foreign countries. They presumable depend on contributions. Their 
levels may differ by countries. 

1.2.5  Public Transfers to Private Households 

Child  Benefits  (Kindergeld):  Parents  with  dependent  children  are  eligible  to  child  benefits. 
Married couples can choose who receives the benefits. In case of parents living separately, the 
one with whom the child stays most of the time, or the one who bears the larger  share of the 
maintenance, receives the benefits. Benefits are paid for biological, adopted, or foster children 
who live in the same household with their parents. They are paid up to the age of 18. Eligibility 
is prolonged up to the age of 25 in case children are still in education and do not work more than 
20 hours a week in dependent employment. As an alternative to child benefits, parents can claim 
a  child  tax  allowance  at  the  derivation  of  taxable  income.  Tax  authorities  apply  the  more 
favourable of child benefits and child allowance for the parents according to a higher-yield test.  

Parental-Leave  Benefits  (Elterngeld,  formerly  also  Erziehungsgeld):  Parental-leave  benefits 
were implemented in 2007. They are non-means-tested benefits that generally replace between 
65% and 67% of parents’ foregone net labour earnings in case they suspend employment due to 
the birth of a child. Parental-leave benefits are paid – in addition to child benefits -- for a time 
frame of up to 12 months following the birth of the child, which can be prolonged for another two 
months if parents share parental-leave time such that each of them suspends work for at least two 
months. As an alternative to suspension, part-time work of up to 30 hours per week is allowed. 
The relevant net income is a twelve-month average net income of the time right before the child’s 
birth. Parental-leave benefits are income tax exempt but subject to progression clause in income 
taxation (see Table 2.18). 

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Citizen’s benefit, formerly unemployment benefits II (Bürgergeld, formerly Arbeitslosengeld 
II): All individuals aged between 15 and their pensionable age who are able to work for at least 
three hours per day are eligible for “citizen’s benefit”. “Citizen’s benefit” are means tested with 
respect  to  income  and  wealth  and  they  are  determined  by  the  needs  of  the  family  (partner  – 
married or not – and dependent children, which sums up to the Bedarfsgemeinschaft). This means 
that the household’s income and wealth are considered for the determination of needs, except for 
some  allowances.  This  is  usually  done  by  a  means  test  with  regard  to  income  and  wealth. 
Depending on the number of household members the income threshold per month is calculated 
by  the  amount  of  the  basic  rates  and  the  monthly  rent  including  heating  with  regard  to  the 
household  formation  (lone  parents  or  both  parents  are  living  in  the  household).  However, 
unemployment is no requirement for entitlement, and there is no limitation for the hours worked. 
The  resulting  level  of  benefits  is  determined  by  the  number  of  adults  and  children  in  the 
household,  where  for the  latter  age  is  of  relevance.  In  addition to  the  basic  benefits,  costs  for 
housing and heating, up to a maximum amount, which depends on the size of the household, are 
covered in the context of “citizen’s benefit”. Moreover, contributions to statutory health and old-
age pension insurances are paid.  

Additional Child Benefits (Kinderzuschlag): The additional child benefit is paid if households 
receive an income that covers the parents’ needs according to “citizen’s benefit”, but not the needs 
of children younger than 25 who live in the same household. The level of the additional  child 
benefits depends on the children’s needs and the household‘s income and wealth. Eligible children 
are unmarried, live in the household, and are younger than 25 years. They also need to be eligible 
for child benefits. Own income of the child, market or replacement income, reduces the benefit 
amount. Household income must fall in a range in order for parents to be eligible to additional 
child benefits.  

Social Assistance (Sozialhilfe): Individuals who are not able to work at least three hours per day 
– either because they are aged 65 or older, or because they are aged 18-65 and physically not able 
to work – are entitled to social assistance in order to secure a minimum income for everybody. 
These benefits are means tested with respect to income and wealth and they are determined by 
the  needs  of  the  entire  household.  This  means  that  the  household’s  income  and  wealth  are 
considered for the determination of needs, except for allowances. In the case of general social 
assistance for reduced work, the income threshold per month is calculated by the amount of the 
basic  rates  and  the  monthly  rent  including  heating  with  regard  to  the  number  of  household 
members. The basic social assistance rate is identical to the basic rate from “citizen’s benefit”. 
Basically, social assistance is supposed to secure a minimum income for individuals who are not 
eligible for “citizen’s benefit”, i.e. those younger than 65 and not able to work at least three hours 
per day. Those 65 and older with very low pension income are however entitled to basic old-age 
assistance. 

Means-tested Basic Old-Age Assistance (Bedarfsorientierte Grundsicherung im Alter oder bei 
Erwerbsminderung):  The  basic  old-age  assistance  ensures  the  basic  needs  for  living  for  older 
people and for those individuals, who are permanently fully incapacitated for work. Recipients 
must  have  65  years  of  age,  or  18  years  of  age  and  simultaneously  be  permanently  fully 
incapacitated  for  work  due  to  medical  reasons.  Claim  for  basic  old-age  assistance  have 
individuals, who cannot support themselves with their own income and assets or with the income 
and assets of the non-separated spouse or consensual partner.  

Social Benefits (Sozialgeld): Until 2022, individuals who  were not able to work at least three 
hours per day, so that they were not eligible to “unemployment benefits II”, and who live together 
with  individuals  who  are  themselves  entitled  to  “unemployment  benefits  II”,  were  eligible  to 
social benefits. Social benefits are supposed to capture those people who would otherwise not be 
secured by social assistance. From 2023 on, social benefits have been discontinued and subsumed 

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with unemployment benefits II under the citizen’s benefit. However, the eligibility criteria did not 
change. 

Advances on Alimony Payments (Unterhaltsvorschuss): Up to 2016 (included), children under 
the age of 12 who only have a single mother or a single father (who may be divorced) are eligible 
to advances on alimony payments, if the other parent does not live in the same household and 
does  not provide  any  alimonies,  or  the  amount provided  is  below the  minimum  alimony.  The 
maximum payment period is 72 months and interruptions in the payment period are possible, for 
example, because the other parent temporarily pays sufficient alimonies. If relevant, benefits are 
reduced  by  received  child  benefits  and  respectively  by  widow’s  pensions.  As  of  1  July  2017, 
children between 12 and 18 are also eligible to advances on alimony payments if they are not 
dependent on means-tested transfers or if they do receive means-tested benefits but their parent 
has a gross income of minimum 600 Euro (as described in the Sozialgesetzbuch II, SGB II). The 
maximum payment period of 72 months will no longer be applied. 

from  Non-Profitable  Charity  Organizations 

von 
Benefits 
Wohlfahrtsorganisationen,  e.g.  AWO):  Non-profitable  charity  organizations 
support 
disadvantaged groups in the country. Their field typically includes social work (for children and 
young people, marginal groups, migrants, seniors, families, disabled, etc.), social care and poverty 
reduction, health promotion and prevention, care, counselling and / or training. 

(Geldleistungen 

Housing Benefits (Wohngeld): Individuals in a household, in which the sum of income from all 
members does not exceed a threshold, are entitled to housing allowances. They may be renting or 
owning the house/flat. They are only explicitly eligible to housing benefits in case they  do not 
receive  “citizen’s  benefit”  or  social  assistance.  Otherwise,  housing  benefits  are  implied  by 
“citizen’s benefit”. The level of benefits generally depends on the number of household members, 
the sum of their net incomes, where certain expenses for costs of living may be deducted up to 
certain  thresholds,  and  the  costs  of  rent  or  of  loan  repayments  and  maintenance,  again  up  to 
thresholds.  A  permanent  heating  cost  component  as  well  as  a  climate  component  are  part  of 
housing benefits since 2023. 

Education Benefits (Ausbildungshilfen/BaFöG): Students entering higher education before the 
age  of  45  are  eligible  to  financial  aid  according  to  the  “Bundesausbildungsförderungsgesetz 
(BaFöG)”. Education benefits are means-tested benefits. The benefit level depends on income 
and wealth of the recipient as well as on income of the recipient’s parents and spouse. Moreover, 
it depends on the presence of siblings as well as their age and income. High school students do 
not need to repay any of the benefits. However, university students get half of the benefits in form 
of an interest-free loan that has to be paid back under certain conditions after education is finished.  

Professional-Training Benefits (Berufsausbildungsbeihilfe): Individuals who are in professional 
training (e.g. apprenticeships) are eligible to professional-training benefits in case their earnings 
do not cover reasonable costs of living. In addition, the recipient either needs to pursue his training 
at a location too far away from his parents’ home to commute, or the recipient needs to be 18 
years old, married, or have a child. The level of benefits depends on income and wealth of the 
recipient as well as on income of the recipient’s parents and spouse. Benefits are usually paid for 
up to 18 months. 

Subsidization of Private Old-Age Pension Savings (Förderung der privaten Altersvorsorge): 
Asset accumulations for private old-age pension income are subsidized in the framework of the 
Riester-scheme  (Riester  benefits).  Generally,  all  individuals  who  contribute  to  the  statutory 
pension  insurance  are  eligible  to  Riester  benefits.  Benefits  are  paid  for  contributions  to  state-
certified savings contracts. Maximum benefits are only paid if a minimum share of gross income 
from the previous year is contributed to the certified savings contract. 

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Building  Society  Premiums  (Wohnungsbauprämie):  Building  society  premiums  are  paid  for 
savings  in  building-society  savings  contracts.  Savers  are  eligible  to  premiums  if  their  taxable 
income falls below an upper limit. Savings to eligible contracts are subsidized up to a maximum 
amount per year, which differs for single individuals and married couples. 

Savings Bonuses for Employees (Arbeitnehmersparzulage): Savings bonuses for employees are 
granted on contributions to capital formation that are directly invested by the employer out of 
basic  salaries  into  various  forms  of  savings  contracts  (vermögenswirksame  Leistungen). 
Employees are eligible to these bonuses if their taxable income is below a given threshold. The 
level of bonuses depends on the type of savings contract. 

Benefits  for  War  Victims  and  Burden  Sharing  (Kriegsopferversorgung  und  –fürsorge, 
Lastenausgleich): Benefits for war victims and burden sharing are paid for military people in case 
they  get  injured  while  pursuing  military  services.  Several  single  benefits  are  subsumed  under 
benefits for war victims and burden sharing. 

1.3  Social contributions 

Employees  and  employers  are  obliged  to  pay  statutory  social  insurance  contributions 
(Sozialversicherungsbeiträge) from gross wages and salaries unless gross income exceeds certain 
thresholds, which allows employees to contract out of statutory health and pension insurance. In 
turn,  social  contributions  grant  benefit  entitlements  (see  section  1.2).  Employers  withhold  the 
employee’s  share  of  the  social  contributions  when  paying  out  the  wage,  and  transfer  them  – 
together  with  their  own  share  –  to  the  employee’s  statutory  health  insurance  fund,  which  is 
responsible for administration. Generally, the contributions are equally split between employees 
and employers.  

Social  insurance  contributions  are  paid  as  fixed  shares  of  gross  income  (contribution  rates, 
Beitragssätze)  up  to  a  contribution  assessment  ceiling  (Beitragsbemessungsgrenze).  Gross 
income above this ceiling is disregarded. Employees who earn more than the assessment ceiling 
for  statutory  pension  insurance  may  opt  out  of  statutory  pension  insurance  completely. 
Concerning  statutory  health  insurance,  a  different  threshold,  i.e.  the  threshold  for  compulsory 
health insurance (Versicherungspflichtgrenze), determines who may opt out. Employees who earn 
salaries above this threshold may choose private health insurance instead. Private health insurance 
premiums do not depend on gross income, but mostly on age, gender, and prior health conditions. 

Family insurance  (Familienversicherung):  1)  Partners  (married  or registered) with  no  or low 
income and 2) children of a (compulsory or voluntary) member of statutory health insurance enjoy 
health insurance coverage without having to pay contributions.  

Mini job / midi job:  Mini jobs (marginal or  short-term employment) are tax-free and free of 
social insurance contributions for the employee. However, the employer has to pay contributions 
to statutory health and pension insurance. Mini jobs do not include contributions to the long-term 
care  and  unemployment  insurance.  In  the  case  of  midi  jobs,  employee’s  social  insurance 
contributions are faded in linearly until they reach the full rates at a gross monthly wage of 2000 
Euro  Employers  pay  their  standard  contribution  rates.  These  contributions  are  comprised  of 
statutory  health,  long-term  care,  pension,  and  unemployment  insurance.  Fading-in  of  social 
contributions is determined by population-average social contribution rates.  

Civil servants: Civil servants are not covered by compulsory social insurance and are not obliged 
to pay contributions. The federal or state government provides financial assistance (approximately 
50%  to  80%  of  the  expenses)  in  cases  of  illness,  birth,  long-term  care  and  death 
(Beihilfeleistungen) and a retirement pension (Versorgungsbezüge). Usually, civil servants have 

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a private health insurance to insure against health costs not covered by the government’s financial 
assistance. 

Self-employment: Statutory health insurance is generally not compulsory for the self-employed 
in Germany, and most of the self-employed choose private health insurance (Fossen, 2009). As 
an exception, artists and publicists are covered by compulsory statutory health insurance if certain 
requirements are met. Voluntary membership in statutory health insurance is possible for self-
employed persons who  fulfill the minimum requirement of previous contributions to  statutory 
health  insurance.  The  self-employed  are  not  generally  obliged  to  contribute  to  compulsory 
pension  insurance,  although  specific  groups  of  the  self-employed  (about  a  quarter  of  all  self-
employed)  are  obliged  to  contribute  to  statutory  pension  insurance  (Schulze  Buschoff,  2007). 
More relevant in practice are private pension insurance schemes – for example, state-aided basic 
pension  schemes  (Rürup-Rente).  People  becoming  self-employed,  having  been  dependently 
employed, have the option to stay in unemployment insurance upon application. 

Others: Since 2009, all individuals are obliged to contract a health insurance. This implies that 
individuals  who  do  not  qualify  for  any  of  the  categories  listed  also  need  to  contract  a  health 
insurance. They are free to decide whether they would like to contract a public or a private health 
insurance.  

1.4  Taxes 

1.4.1  Direct Taxes 

Income tax (Einkommensteuer): Income tax is levied on the income of natural persons. Income 
from various different sources is summed, and after loss compensation and several allowances 
and deductions, taxable income as the tax base is taxed according to a progressive tax schedule. 
Income from single components is added up and certain expenditures are credited against income, 
as well as certain allowances are granted. In the German income tax system in general, married 
couples are taxed jointly with full income splitting, i.e. the tax function is applied to half of the 
sum of the spouses’ taxable incomes, and then the resulting tax amount is doubled. Tax on income 
from dependent employment is collected from persons in dependent employment at source via 
payroll tax (Lohnsteuer). Similarly, tax on capital income is collected at source via withholding 
tax (Kapitalertragsteuer, from 2009 onwards called Abgeltungsteuer). However, these taxes need 
not be final. It is common to file income tax returns, for example to claim income-related expenses 
which exceed the tax allowable lump sum for income-related expenses. 

Solidarity Surcharge (Solidaritätszuschlag): Up to 2021 there was a surcharge of 5.5% on the 
income tax and the capital tax, which was originally motivated with the costs of the German re-
unification. The solidarity surcharge will be partly abolished as of the year 2021. No solidarity 
surcharge  is  due  on  income  tax  up  to  17,543  Euro  (35,086  Euro  for  married  couples).  For 
exceeding amounts, a sliding scale is applied for taxable income up to  101,411 Euro (202,822 
Euro for married couples). Taxpayers with taxable income above 101,411 Euro are fully subject 
to  solidarity  surcharge.  The  sliding  scale  will  work  as  follows:  (the  yearly  income  tax  –  the 
freezone) x 0.119 = solidarity surcharge.  

Church Tax (Kirchensteuer): Members of the catholic and protestant churches (and some smaller 
churches) pay this tax to finance their churches, which is collected by the government together 
with the income tax (respectively, the payroll tax and the withholding tax on capital income). The 
tax base is the income tax, which is used to apply a flat tax rate of 8% (in Bavaria and Baden-
Württemberg) or 9% (in the other Federal States). Taxpayers can avoid paying the church tax by 
officially leaving church, which is why church tax may be regarded as voluntary.  

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Property Tax (Grundsteuer): A tax on real estate (land and buildings), based on the assessed tax 
value. Property Tax A applies to agriculture and forestry, and Property Tax B applies to other 
property. The tax rate varies over municipalities, as they can levy their own tax multiplier. First, 
to calculate the uniform basic tax (Steuermessbetrag), the assessed tax value is multiplied by a 
basic federal tax rate (Steuermesszahl), which is 0.6% for Property Tax A and 0.35% for Property 
Tax B (there are reduced rates for one and two family houses, and different rates for the Eastern 
federal  states  because  of  a  different  data  basis  for  the  assessed  tax  values).  Second,  the 
municipality specific multiplier (Hebesatz) is applied to the uniform basic tax to yield the tax 
liability. 

Inheritance  Tax  (Erbschaftsteuer):  A  tax  on  capital  transfer  in  case  of  inheritance.  Capital 
transfers between living persons are similarly taxed by the gift tax (Schenkungsteuer). There is a 
tax free allowance whose amount depends on who is the recipient. There are also additional tax 
exemptions for business capital if the business (with its employees) is continued. Tax rates depend 
on the family relationship (partner, children, grandchildren, siblings, and other people) and are 
progressive in the tax base, with a minimum rate of 7% and a maximum rate of 50%. 

Real property acquisition tax (Grunderwerbsteuer): Tax due when real property or shares of 
real  property  is  transferred.  The  general  tax  rate  is  3.5%,  but  the  German  states  may  choose 
different rates. 

Motor Vehicle Tax (Kfz-Steuer): Tax paid by owners of motor vehicles, depending on cylinder 
capacity and carbon dioxide emissions. Lorries and trailers are additionally assessed on the basis 
of their maximum permissible gross weight. 

Corporate Tax (Körperschaftsteuer): Tax on the income of corporations with a flat tax rate of 
15%.  

Local  Business  Tax  (Gewerbesteuer):  Both  incorporated  and  non-incorporated  business 
enterprises are liable to the local business tax, except for liberal professionals and farmers. This 
tax  is  the  main  source  of  revenue  of  German  municipalities.  Its  tax  base  is  primarily  the 
enterprise’s operating profit attributed to the local jurisdiction, augmented by certain fractions of 
interest and other financing expenses. Unincorporated firms benefit from an allowance. Tax rates 
vary over municipalities, as the local jurisdictions apply their own multipliers (similarly to the 
Property Tax, see above). Sole proprietors and partners of non-incorporated firms can credit at 
least parts of the local business tax against their personal income tax (PIT) liability, depending on 
the size of the multiplier. 

1.4.2 

Indirect Taxes 

Value  Added  Tax  (Umsatzsteuer/Mehrwertsteuer):  Tax  on  almost  all  consumption  expenses. 
Technically, it is collected from the enterprises selling goods and services. These enterprises can 
claim back the VAT paid for their inputs. The general  tax rate is 19%. A reduced rate of 7% 
applies for most foodstuffs and certain other basic necessities, and since 2010 also for overnight 
stays in hotels1. 

Insurance  tax  (Versicherungsteuer):  Tax  on  insurance  contributions  or  premiums  except for 
statutory and private life and health insurance and statutory unemployment insurance. The tax 
rate is generally 19%; other rates apply for specific insurances. 

Excise taxes (Verbrauchsteuern): Specific taxes on the consumption or usage of certain goods. 
Most revenue is collected from the energy tax (Energiesteuer), which is a tax on all fossil and 

1  Full  list  on  goods  with  reduced  rate  or  tax  exemption  can  be  found:  https://www.gesetze-im-
internet.de/ustg_1980/__12.html and https://www.gesetze-im-internet.de/ustg_1980/anlage_2.html 

16 

 
 
                                                           
EUROMOD Country Report – GERMANY 

biological  energy  carriers,  the  tobacco  tax  (Tabaksteuer)  and  the  electricity  tax  (Stromsteuer) 
Further excise taxes are of minor importance and are mostly levied on different kinds of alcoholic 
beverages and products, like the alcohol tax (Alkoholsteuer), beer tax (Biersteuer) or sparkling 
wine  tax  (Schaumweinsteuer).  All  excise  taxes  are  unit  taxes  with  differentiated  tax  rates 
depending on specific characteristics of the taxed good, e.g. beverages with higher volumes of 
alcohol face typically higher tax rates. 

2.  SIMULATION  OF  TAXES,  SOCIAL  INSURANCE  CONTRIBUTIONS  AND 

BENEFITS IN EUROMOD 

2.1  Scope of simulation 

As  a  tax  and  benefit  microsimulation  model  covering  all  EU  member  countries,  the  scope  of 
EUROMOD must necessarily be limited to simulating policies, for which information provided 
in the data is sufficient to adequately implement the single factors of relevance in the respective 
policy regulations. In the case of Germany, this does not hold for all policies presented in Sections 
1.2, 1.3 and 1.4. The main limitations with respect to simulation of the tax and benefit rules in 
EUROMOD  are  related  to  insufficient  information,  such  as  the  contribution  history  or  the 
earnings history of the potential recipients of a benefit, e.g. for the simulation of contributory old 
age benefits information on the history of the individual is required. This data is indispensable for 
a  proper  simulation,  and  since  it  is  missing  in  SILC  no  simulation  of  the  respective  policy  is 
possible.  Another  example  would  be  indirect  taxes,  which  are  as  well  beyond  the  scope  of 
EUROMOD because of lack of information on expenditures in SILC.  

Table 2.1 and Table 2.2 tabulate all policies that are relevant in the context of EUROMOD. They 
are relevant because they are either explicitly simulated in EUROMOD, or because they are not 
explicitly  simulated,  but  implicitly,  as  they  are  interrelated  to  other  policies  that  are  either 
explicitly  simulated  or  that  are  in  turn  interrelated  to  simulated  policies.  The  most  relevant 
variable in this context is income from employment and pensions. On the one hand, it is a function 
of some policies, such as social insurance contributions, simulated or not simulated, and on the 
other hand it is an input variable in certain simulated policies that condition eligibility on a means 
test.  Such  interdependencies  are  further  treated  in  the  next  section.  Firstly,  all  policies  are 
categorized in Table 2.1 and Table 2.2 into such that are simulated and such that are not simulated. 
For the latter, relevant information on the main limitations for simulation are provided. 

Generally, most of the social benefits, which merely condition on a means test, are simulated, 
some with more or less restrictive assumptions (Table 2.1). More on these assumptions will be 
said in Sections 2.5, 2.7 and 2.8. However, most of the contributory benefits, most of them relating 
to all kind of pensions, are not simulated, due to lack of sufficient information on the contribution 
history.  Moreover,  many  benefits  for  sickness  or  disability  are  not  simulated,  as  there  is  not 
enough information reported on the duration and type of sickness or injury, and on the degree of 
disability. Furthermore, the degree of loss of the earnings capacity in relation to injury or disability 
would be valuable information that is not sufficiently observed in the data. 

Some policies could only partly be simulated, as some regulations are not simulated due to a lack 
of sufficient information in the micro data. Education benefits (BaFöG) belong to this group of 
policies. For students who do not live with their parents, there is a lack of information on income 
and  wealth of their parents.  Simplifying  assumptions have  though  been  made  in  order  to  also 
simulate education benefits for students living on their own. For students who do live with their 
parents this information is observed or can be estimated. 

17 

 
 
 
EUROMOD Country Report – GERMANY 

Policies that are neither observed in the micro data nor simulated in EUROMOD are completely 
excluded from the model. Such policies from the statutory unemployment insurance are short-
term  work  compensations,  transfer  short-term  work  compensations,  seasonal  short-term  work 
compensations, insolvency benefits, as well as benefits for part-time unemployment, benefits for 
early retirement, benefits for business start-ups, and benefits for re-training. From the statutory 
accident insurance, the non-simulated benefits are injury benefits, sickness benefits for military 
people,  and  severance  benefits.  From  the  statutory  pension  insurance,  these  are  child-care 
pensions and supplementary pensions for employees in public service. Then there are pensions 
from other institutions, e.g. pensions from  employer schemes, and pensions from schemes for 
self-employed, freelancers, and farmers, which are also not simulated. Finally, there are public 
transfers  to  private  households  that  are  not  included  in  the  data,  and  hence  excluded  from 
EUROMOD,  such  as  professional  training  benefits,  subsidizations  of  private  old-age  pension 
savings,  home-building  allowances,  building  society  premiums,  and  savings  bonuses  for 
employees. 

Table 2.1 Simulation of benefits in EUROMOD [2021-2024] 

Benefit for early 
retirement 
Citizen’s benefit 

Variable 
name(s) 

byr 

bunnc_s 

Unemployment benefits I  bunct_s 

Severance pay 

ysv 

Covid-related wage 
compensation for 
employees 
Covid-related financial 
help for self-employed 

bwkmcee_
s 

bencovids
e_s 

Benefit for start-ups 

bunot 

Benefit for re-training 

buntr 

bunls 

Lump-sum unemploy. 
benefits 
Old-age statutory 
pension 
Old-age pension 
(employees) 
Foreign old-age pension  poaab 

poass 

poa00 

Old-age pension (self-
employed) 
Old-age pension (empl. 
pub. serv.) 
Old-age pension (civil 
servants) 
Old-age pension 
(disability) 

poaps 

poapu 

poacs 

poadi 

Treatment in 
EUROMOD 
2021  2022  2023  2024 
I 

I 

I 

I 

S 

PS 

S 

PS 

S 

PS 

S 

PS 

I 

S 

I 

S 

I 

S 

I 

S 

- 

- 

- 

- 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

18 

Comments 

Missing data on contribution 
history & wage history 

Missing data on Contribution 
history 
Missing data on Job 
termination 
Need to simulate transitions 
into wage compensation 
scheme 
Policy is turned off in the 
baseline due to missing 
information on Covid-related 
decrease in self-employed 
income. 
Missing data on self-employed 
& their business history 
Missing data on unemployed; 
eligibility for re-training 
Job termination 

Contribution & wage history 

Contribution history 

Occupation in a foreign 
country 
Contribution history 

Employment history 

Employment history 

Employment history; degree of 
injury 

 
 
 
 
 
 
EUROMOD Country Report – GERMANY 

Benefits for war victims 
(older than 65 years) 
Orphan's pension 

poawr 

psuor 

Survivor's pension 

psuwd 

pdiwr 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

Benefits for war victims 
(younger than 65 years) 
Sickness benefits 

Care benefits from long-
term care insurance 
Disability pensions for 
civil servants 
Pensions for reduced 
work ability 
Pension from accident 
insurance 
Maternity-leave benefit 

Parental-leave benefit 

Add. child benefit 
(Kinderzuschlag) 
Child benefits 

Covid-related benefit for 
children (Kinderbonus) 
Lump-sum energy 
transfer 
(Energiepreispauschale) 
Heating bonus 
(Heizkostenzuschuss) 
One-off payments for 
unemployed and 
recipients of social 
assistance 
Educational allowance 

bhl_s 

PS 

PS 

PS 

PS 

pdica 

pdiot 

pdi00 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

I 

pdiss_s 

PS 

PS 

PS 

PS 

bmact_s 

bplct_s 

bchot_s 

bch00_s 

bencovidc
h_s 
blsxp_s 

bhtxp_s 

bsaxp_s 

PS 

PS 

PS 

PS 

PS 

PS 

PS 

PS 

S 

S 

S 

- 

- 

- 

S 

S 

S 

S 

S 

S 

S 

S 

- 

- 

. 

- 

S 

S 

- 

- 

. 

- 

bched_s 

PS 

PS 

PS 

PS 

Advances on alimony 
payments 
Other family benefits 

bcham 

bfaot 

bsaot_s 

Social benefits 
(Sozialgeld) 
Social assistance 
(Sozialhilfe) 
Basic old-age assistance  bsaoa_s 

bsa00_s 

Benefits from charity 
organizations 
Contributions to 
agricultural pension 
funds 
Education benefits 

bsapu 

bsa01 

I 

I 

S 

S 

S 

I 

I 

I 

I 

S 

S 

S 

I 

I 

I 

I 

S 

S 

S 

I 

I 

I 

I 

S 

S 

S 

I 

I 

bed_s 

PS 

PS 

PS 

PS 

Housing Benefits 

bho00_s 

Professional Training 
Ben. 

- 

S 

E 

S 

E 

S 

E 

S 

E 

19 

Participation in military 
services 
Biography; contributions of 
deceased 
Biography; contributions of 
deceased 
Participation in military 
services 
Employment history; sickness 
severity 
Degree of injury; cash and in-
kind benefits 
Employment history; injury 

Employment history; injury 

Injury and remaining earnings 
capacity 
Contribution history 

Employment history 

Mix of cash and in-kind 
benefits 
Alimony payments 

Aggregate of very minor 
benefits  

Missing data on data on 
parents’ income (if on their 
own) 

Professional training & 
parental income 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROMOD Country Report – GERMANY 

- 

- 

- 

- 

- 

E 

E 

E 

E 

Savings 

Subsidies for prv. old-
age savings 
Home-building 
allowances 
Building society 
premiums 
Savings bonuses for 
employees 
Notes: “-”: policy did not exist in that year; “E”: excluded from the model as it is neither included in the 
micro-data nor simulated; “I”: included in the micro-data but not simulated; “PS” partially simulated as 
some of its relevant rules are not simulated; “S” simulated although some minor or very specific rules 
may not be simulated. 

Housing purchases 

Savings 

Savings 

E 

E 

E 

E 

E 

E 

E 

E 

- 

- 

- 

The simulation of taxes and social insurance contributions for Germany is limited in EUROMOD 
to  direct  taxes,  i.e.  the  personal  income  tax  and  capital  income  tax,  as  well  as  mandatory 
contributions to the social security systems. Personal income taxation is treated in two different 
policies for individual and joint taxation, mainly for the sake of a clear representation.  

Social security contributions are differentiated by such contributions paid for by the employer, by 
employees, by self-employed, and by pensioners. Contributions paid for by the employer and by 
employees are simulated for regular, full- or part-time employment, as well as for marginal (or 
short-term) employment in the context of the so-called mini jobbers and midi jobbers, for which 
contribution rates differ. Contribution rates simulated for self-employed are restricted to pension 
insurance contributions for certain industries (education, health), where self-employed are obliged 
to  contribute  to  the  statutory  pension  insurance.  For  pensioners,  only  contributions  to  health 
insurance and long-term care insurance are relevant. More details will be presented in  Section 
2.7. 

Table 2.2 Simulation of taxes and social insurance contributions in EUROMOD [2021-2024] 

Comments 

Calculations based on 
extended input files with 
consumption expenditures 
from HBS 
Calculations based on 
extended input files with 
consumption expenditures 
from HBS 

Variable 
name(s) 

tin_s 

tinit_s 
tinjt_s 
tinkt_s 

Taxes 
Income Tax: tax 
allowances and taxable 
income 
Individual Taxation 
Joint Taxation 
Capital income taxation 
Value Added Tax 

Treatment in EUROMOD 
2021 

2022 

2023 

2024 

S 

S 
S 
S 
S 

S 

S 
S 
S 
S 

S 

S 
S 
S 
S 

S 

S 
S 
S 
S 

Excise duties 

S 

S 

S 

S 

Social Insurance 
Contributions 
Employer 
   to pension insurance 
   to health insurance 

tscer_s 
S 
tscerpi_s  S 
tscerhl_s  S 

S 
S 
S 

S 
S 
S 

S 
S 
S 

20 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROMOD Country Report – GERMANY 

   to long-term care 

tscerci_s  S 

insurance 

   to unemployment 

tscerui_s  S 

insurance 

   to accident insurance 
Employee 
   to pension insurance 
   to health insurance 
   to long-term care 

tscerac_s  S 
tscee_s 
S 
tsceepi_s  S 
tsceehl_s  S 
tsceeci_s  S 

insurance 

   to unemployment 

tsceeui_s  S 

insurance 

   to accident insurance 
Self-employed 

tsceeac_s  S 
S 
tscse_s 

   to pension insurance 

tscsepi_s  S 

Pensioner 
   to health insurance 
Other 
   to health insurance 

tscpe_s 
S 
tscpehl_s  S 

tscot_s 

S 

S 

S 

S 
S 
S 
S 
S 

S 

S 
S 

S 

S 
S 

S 

S 

S 

S 
S 
S 
S 
S 

S 

S 
S 

S 

S 
S 

S 

S 

S 

S 
S 
S 
S 
S 

S 

S 
S 

S 

S 
S 

S 

Many social contributions for 
the self-employed are 
voluntary, and they are not 
observed. 
Pension insur. for self-
employed is voluntary 

People with no or low 
earnings; minimum amount 
assumed 

Notes: “-” policy did not exist in that year; “E” policy is excluded from the model’s scope as it is neither 
included in the microdata nor simulated by EUROMOD; “PS” policy is partially simulated as some of its 
relevant rules are not simulated; “S” policy is simulated although some minor or very specific rules may 
not be simulated. 

2.1.1  Partially simulated tax-benefit components 

The unemployment benefit I (EUROMOD variable bunct_s) is partially simulated. As information 
on  past  earnings  is  not  available  in  SILC,  we  impute  them  using  information  on  the  reported 
receipt of the benefit (bunct) in SILC. Thus, the simulation is restricted only to those individuals 
who have reported the unemployment benefit I in the micro-data.   

Sickness  benefits  (EUROMOD  variable  bhl_s)  are  also  partially  simulated.  This  is  for  the 
following two reasons: First, as information on prior earnings is not available in SILC, we impute 
them using information on the reported receipt of the benefits (bhl) in SILC. Thus, the simulation 
is  restricted  only  to  those  individuals  who  have  reported  sickness  benefits  in  the  micro-data. 
Second,  as  information  on  the  degree  of  disability  is  not  available  in  SILC,  we  simplify  the 
simulation by assuming that each entitled individual gets the minimum benefit amount.  

For similar reasons (missing information on the contributory history, the entitlement basis and the 
degree of disability) the disability pension from the statutory accident insurance (EUROMOD 
variable pdiss_s) is partially simulated.  

The  maternity  leave  benefit  (EUROMOD  variable  bmact_s)  and  parental  leave  benefit 
(EUROMOD  variable  bplct_s)  are  also  partially  simulated  because  for  full  simulation  more 
information on when the child was born, the contributory history and the hours worked is needed. 
As with the benefits mentioned above, information on past earnings is imputed using information 
on the reported benefit receipts (bmact and bplct) in the SILC data.    

21 

 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
EUROMOD Country Report – GERMANY 

The  education  benefit  (EUROMOD  variable  bed_s)  is  partially  simulated  because  parents’ 
income and wealth is not observed for the students who no longer live with their parents. Although 
efforts have been made to impute parents’ income for this sample of students, the simulation of 
the benefit is restricted to those students who report the benefit (bed) in the SILC data. The benefit 
is fully simulated for students who still live with their parents.  

The  education  allowance  (EUROMOD  variable  bched_s)  is  partially  simulated.  Although  we 
simulate the main benefit component, there are additional amounts which are a mixture between 
cash and in-kind benefits and depend on the region. As we cannot distinguish between the cash 
and in-kind benefits, we cannot simulate the entitlement to them.  

The  deduction  of  childcare  expenses  (EUROMOD  variable  tintace_s)  is  partially  simulated 
because there is no information on the actual childcare expenses. Instead, we make assumptions 
about  which  families  may  be  entitled  to  the  deduction  and  simulate  for  them  the  maximum 
deduction amount.   

Finally, the  deduction of income-related expenses (EUROMOD  variable tintaee_s) is  partially 
simulated  because  we  simulate  only  the  minimum  lump-sum  amount,  as  we  do  not  have 
information on other types of expenses. 

2.2  Main policy changes [2021 –2024] 

Policies 

   2021 → 2022 

Benefits 

Several one-off 
payments 

Social 
contributions 

insurance 

Direct taxes 

Consumption taxes  

Other 

Increase  of  basic 
and 
allowance 
of 
allowance 
income-related 
expenses 
- introduction of 
reduced VAT rate 
on natural gas 
purchases 
- temporary 
decrease of energy 
tax on fuels 

2023 → 2024 

Change in long-term care 
contributions 

2022 → 2023 
Reform of social assistance 
housing 
(Bürgergeld), 
benefits 
education 
and 
benefits 
Increase of mini- and midi-
job thresholds 

Significant  adjustment  of 
income tax brackets due to 
high inflation 

Return to full VAT rate 
for food in restaurants and 
natural gas purchases  

2.3  Order of simulation and interdependencies 

Table 2.3 tabulates the order in which the single policies are simulated in EUROMOD. The order 
in which the policies are simulated is made explicit in Table 2.3. This order is mainly determined 
by  interdependencies  between  the  policies,  as  far  as  these  could  have  been  considered  in  the 
model. These interdependencies shall be briefly described in the following. 

22 

 
 
  
  
  
  
  
  
  
 
  
  
  
 
 
EUROMOD Country Report – GERMANY 

Minimum  wage  is  simulated  upfront.  Right  after,  a  preliminary  simulation  of  contributory 
unemployment benefits is carried out. This enables to identify the recipients of disability benefits 
as individuals who are not working, do not receive unemployment benefits and do not actively 
search for a job. In turn, this allows simulating disability pensions, which enter the income base 
that determines the contributions to social security of pensioners. Next, contributions to social 
security systems are simulated. Except for the social security contributions of pensioners, these 
policies only condition on observed income from employment. In case minimum wage is switched 
on, it replaces observed employment income where relevant. The first social benefits simulated 
are child benefits. They are independent of any income or wealth. Then come the actual (final) 
simulation  of  contributory  benefits  from  the  unemployment  insurance,  i.e.  unemployment 
benefits I, which are computed again from scratch, this time making use of the information about 
social security contributions generated previously. By their contributory nature, they condition on 
income in past periods, but not on income in the current period.  

Then comes a benefit that does not condition on any of the benefits simulated so far, but that is 
itself  an  input  into  benefits  simulated  at  a  later  stage.  Sickness  benefits  are  a  function  of 
unemployment benefits I when benefit levels are calculated. Thereafter, maternity leave benefits 
and parental leave benefits are simulated. Both are a function of employment income as well as 
unemployment benefits I. 

Then, taxation is simulated. Thereby, all relevant benefits can be considered in the simulation of 
personal  income  taxation.  This  is  necessary  because  some  benefits  belong  to  taxable  income, 
while other benefits are excluded from the calculation of taxable income but are considered at the 
determination  of  the  relevant  tax  rate  (progression  clause).  As  a  result,  almost  all  benefits 
simulated are considered at income taxation. 

Next education benefits are simulated. They condition on income and wealth of the students as 
well  as  their  parents,  where  observed  current  income  is  applied.  In  addition,  simulated  social 
security contributions and taxes paid by students and their parents are taken into account, as they 
play a role in determining the amount of the benefit. 

Next,  housing  benefits  are  simulated.  Relevant  income  in  the  sense  of  housing  benefits  is 
computed  taking  into  account  whether  individuals  pay  income  taxes  and/or  social  security 
contributions. 

Then, citizen’s benefit, the first means-tested benefit, are simulated. They are non-contributory 
benefits, conditioning eligibility on a means test, for which all benefits and taxes simulated earlier 
are an input, and on ability to work.  

Next, means-tested social benefits that have the scope to secure a minimum income are simulated. 
These  are  old-age  social  assistance,  general  social  assistance  including  social  benefits  for 
children,  and  additional  child  benefits.  All  these  benefits  condition  eligibility  on  disposable 
income after all other benefits are considered, especially after citizen’s benefit are considered. 
They  mainly  cover those  individuals that  are not  eligible  to  citizen’s benefit  because  they  are 
permanently  not  able  to  work  a  minimum  number  of  hours  per  day,  either  because  they  are 
disabled, or because they are permanently injured, or because they are too old. 

Finally, additional child benefits and educational allowances are simulated. 

23 

 
 
 
 
 
 
EUROMOD Country Report – GERMANY 

Table 2.3 EUROMOD Spine: order of simulation 

Policy 
setdefault_de 
uprate_de 
constdef_de 
ilsdef_de 
ilsudbdef_de 

ildef_de 

Random_de 

TransLMA_de 

tudef_de 
yem_de 
neg_de 
bunct_de 
bwkmcee_de 

bencovidse_de 
yseadj_de 

2021  2022  2023  2024  Description of the instrument and main output 
on 
on 
on 
on 
on 

on 
on 
on 
on 
on 

on 
on 
on 
on 
on 

on 
on 
on 
on 
on 

UDB 

INCOME 

STANDARD 

DEF: SET DEFAULT VALUES 
DEF: UPRATING FACTORS 
DEF: constants 
DEF: STANDARD INCOME CONCEPTS 
DEF: 
CONCEPTS 
DEF: 
CONCEPTS 
DEF:  random  assignment  for  Covid-related 
policies 
DEF: select individuals that do the transitions 
to  wage  compensation/unemployment  (LMA 
transition) 
DEF: ASSESSMENT UNITS 

NON-STANDARD 

INCOME 

on 

on 

on 

on 

on 

on 

on 

on 

on 

on 

on 

on 

on 

on 

on 

on 
switch  switch  switch  switch  INC: Minimum Wage 
on 
on 
on 

on 
on 
on 

on 
on 
on 

on 
on 
on 

off 
off 

off 
off 

off 
off 

off 
off 

pdiss_de 

on 

on 

on 

on 

tscer_de 
tscee_de 
tscse_de 

tscpe_de 
tscot_de 
bch00_de 
bencovidch_de 
bunct_de 

bhl_de 

bmact_de 
bplct_de 
blsxp_de 

tinkt_de 
tin_de 

tinit_de 

tinjt_de 

bed_de 
bho00_de 
bhtxp_de 
bunnc_de 
bsaot_de 

on 
on 
on 

on 
on 
on 
on 
on 

on 

on 
on 
n/a 

on 
on 

on 

on 

on 
on 
n/a 
on 
on 

on 
on 
on 

on 
on 
on 
on 
on 

on 

on 
on 
on 

on 
on 

on 

on 

on 
on 
on 
on 
on 

on 
on 
on 

on 
on 
on 
n/a 
on 

on 
on 
on 

on 
on 
on 
n/a 
on 

on 

on 

on 
on 
n/a 

on 
on 

on 

on 

on 
on 
n/a 
on 
on 

on 
on 
n/a 

on 
on 

on 

on 

on 
on 
n/a 
on 
on 

der 

social 

(Rente 

scheme 

insurance 

compensation 

self-employed 

from  stat.  acc. 
gesetzlichen 

INC: recode negative values of incomes to zero 
BEN: unemployment benefits I (ALG I) 
BEN:  Wage 
(Kurzarbeitergeld) 
BEN: financial help for self-employed 
INC:  Self-employment  income  recalculation 
after financial help 
BEN:  disability  pension 
Insurance 
Unfallversicherung) 
SIC: employer social insurance contribution 
SIC: employee social insurance contribution 
SIC: 
contribution 
SIC: pensioner social insurance contribution 
SIC: other social insurance contribution 
BEN: child benefits (Kindergeld) 
BEN: covid benefit for children (Kinderbonus) 
BEN:  unemployment  benefits  I  (ALG  I) 
(repetition of policy with order 8) 
BEN:  Sickness  Benefits  (Krankengeld  der 
oder 
prvt. 
GKV, 
Krankentagegeldversicherung) 
BEN: maternity leave 
BEN: parental leave 
BEN: 
(Energiepreispauschale) 
TAX: capital income taxation 
TAX:  income  taxation  (Einkommensteuer): 
taxable income 
TAX:  income  taxation  (Einkommensteuer): 
individual taxation 
TAX:  income  taxation  (Einkommensteuer): 
joint taxation 
BEN: education benefits (BaFöG) 
BEN: housing benefits (Wohngeld) 
BEN: Heating bonus (Heizkostenzuschuss) 
BEN: citizen’s benefit (Bürgergeld) 
BEN:  citizen’s  benefit  (Bürgergeld),  formerly 
social benefits (Sozialgeld) 

Pflegezusatz- 

Lump-sum 

transfer 

energy 

24 

 
 
EUROMOD Country Report – GERMANY 

bsaoa_de 

bsa00_de 
bsaxp_de 

blsxpsd_de 
bchot_de 

bched_de 

tco_de 
output_std_de 

output_std_hh_de 

on 

on 
n/a 

n/a 
on 

on 

on 
on 

on 

on 

on 
on 

n/a 
on 

on 

on 
on 

on 

on 

on 

on 
n/a 

on 
n/a 

on 
on 

on 

on 
on 

on 

on 
on 

on 

on 
on 

on 

2.4  Policy extensions 

social 

old-age 

assistance 

additional 

BEN: 
(Grundsicherung im Alter) 
BEN: general social assistance (Sozialhilfe) 
BEN:  One-off  payments  for  unemployed  and 
recipients of social assistance 
BEN: Lump-sum energy transfer for students 
BEN: 
(Kinderzuschlag) 
BEN:  child  benefits:  educational  allowance 
(Bildungspaket) 
TAX: Commodities 
DEF:  STANDARD  OUTPUT  INDIVIDUAL 
LEVEL 
DEF:  STANDARD  OUTPUT  HOUSEHOLD 
LEVEL 

benefits 

child 

  Minimum Wage Adjustment (MWA), allowing the user to switch on/off the minimum 
wage simulation. The default for the baselines is OFF. When switched on, a parameter 
for an hourly minimum wage, valid for all employees, must be specified. The policy then 
simulates  minimum  earnings  based  on  the  minimum  wage  and  assigns  the  greater  of 
minimum wage and actual earnings to the individual, for all months in the base year in 
which the individual was employed2.  

  Benefit Calibration Adjustments (BCA), allowing the user to calibrate the receipt of 
benefits to match the simulated total expenditure of a benefit to real expenditure from 
external statistics. The extension is implemented for the simulation of the housing benefit 
(bho00_de), the citizen's benefit/unemployment benefits II (bunnc_de) and the additional 
child benefit (bchot_de). The default for the baseline is OFF. When the extension is on, 
a subset of eligible of observations is selected randomly as beneficiaries so that the real 
expenditure is reached, removing the benefit from the rest of the eligible observations; 
when off, all eligible observations are kept as beneficiaries. This extension shares most 
of its functions with the BTA extension; as a  general rule, only one of the extensions 
should be on, but if both are, the lowest rate between the take-up rate and the calibration 
rate  will  be  applied.  More  details  on  the  specific  implementation  of  BCA  and  BTA 
extensions are provided in the subsections describing the corresponding benefits. 

  Benefit  Take-up  Adjustments  (BTA),  allowing  the  user  to  apply  non-take-up 
corrections.  The extension is used for the simulation of the housing benefit (bho00_de)3, 
the  citizen's  benefit/unemployment  benefits  II  (bunnc_de)4  and  the  additional  child 
benefit (bchot_de) 5. The default for the baseline is OFF. When the extension is on, a 

2 A minimum wage was introduced on 1 January 2015 in Germany. It applies to each individual aged at 
least 18 and it amounted to 9.50 Euro in 2021. By the beginning of 2022 minimum wage increased to 
9.82 Euro per hour. However, there have been two further adjustments in 2022, with an increase to 10,45 
Euro per hour by the 1st of July and to 12 Euro per hour by the 1st of October. In 2024 the minimum wage 
increased to 12.41 Euro. Compulsory internships in the context of university education are excluded from 
the minimum wage. 
3 Estimation of non-take-up from external source: 
https://econpapers.repec.org/article/palcompes/v_3a60_3ay_3a2018_3ai_3a4_3ad_3a10.1057_5fs4129
4-017-0041-5.htm 
4 Estimation of non-take-up from external source: https://doku.iab.de/discussionpapers/2019/dp0619.pdf  
5 Estimation of non-take-up from external source: 
https://econpapers.repec.org/article/palcompes/v_3a60_3ay_3a2018_3ai_3a4_3ad_3a10.1057_5fs4129
4-017-0041-5.htm  

25 

 
 
                                                           
EUROMOD Country Report – GERMANY 

share of (weighted) eligible observations equal to the take-up rate is selected randomly 
as beneficiaries, removing the benefit from the rest of the eligible observations; when off, 
all  eligible  observations  are  kept  as  beneficiaries.  This  extension  shares  most  of  its 
functions with the BCA extension; as a general rule, only one of the extensions should be 
on, but if both are, the lowest rate between the take-up rate and the calibration rate will 
be applied. More details on the specific implementation of BCA and BTA extensions are 
provided in the subsections describing the corresponding benefits. 

  HHoT – Unemployment extension (HHoT_un): this extension improves the simulation 
accuracy  of  the  unemployment  insurance  benefit  when  EUROMOD  is  run  with 
hypothetical data. For instance, in most countries the legislation of this benefit requires 
information  on  variables  such  as  individuals’  employment  history,  which  are  not 
available in SILC; we can define these variables in HHoT and use them to simulate the 
policy’s  rules  more  precisely  when  running  the  model  with  hypothetical  data.  This 
extension is set to on when the model is used with HHoT data. 

2.5  Benefits 

2.5.1  Child Benefits (bch00_de) 

Child benefits are monthly non-means-tested non-taxable benefits paid to families with dependent 
children  below  an  age  limit.  Benefit  levels  depend  on  how  many  children  there  are  in  the 
household. 

  Definitions 

The  unit  of  analysis  is  the  family.  Families  include  couples  and  their  own,  as  well  as  loose 
dependent children. Dependent children are biological, adopted, or foster children who live in the 
same household with their parents. 

  Eligibility Conditions 

There are two groups of eligible children.6 1) Generally, eligible children can at maximum be 
aged 18. 2) The age limit is extended to 25 in case children are still in tertiary education and, until 
2011,  in  case  their  income  did  not  exceed  a  threshold  (see  Income  Test).  From  2012  on,  the 
income limit has been replaced by a limit on hours worked by the child. If the child is disabled, 
and has been disabled since the age of 25 at least, no age limit applies. In case of parents living 
separately, the one with whom the child stays most of the time, or the one who bears the larger 
share of the maintenance, receives the benefits. 

 

Income Test 

N/a. 

  Benefit Amount 

The benefit is paid monthly to one of the parents. The benefit amounted to 192 Euro for the first 
two children, 198 Euro for the third child, and 223 Euro for the fourth and all following children 
in 2017. In 2018 and the first half of 2019, benefits amounted to 194 Euro per month for the first 
two children, 200 Euro for the third child, and 225 Euro for the fourth and all following children. 

6 Strictly speaking eligibility is related to the parents, not to the children. However, we will be speaking 
of eligible children, as it effectively  makes no difference,  given the eligible criteria are  related to the 
children, and in the simulation, benefits are first assigned to the children, too, and later aggregated at 
household level and assigned to the head. 

26 

 
 
 
                                                           
EUROMOD Country Report – GERMANY 

From  July  2019  on,  benefit  amounts  are  further  increased  by  10  Euro  per  month  and  child, 
however, these changes will only be modelled from 2020 onward, since they enter into force after 
June 30, 2019. From January 1st, 2022 the benefit amounts to 219 Euro for the first two children, 
225 euro for the third child and for the fourth and following children parents receive 250 Euro. In 
2023 and 2024 the benefit is uniformly 250 Euro for every child in the household. 

  EUROMOD modelling 

It is assumed that disabled children have been disabled since the age of 25 at least. Means tests 
and benefit assignment are simulated separately for children living with their parents and children 
living on their own. For children not living with their parents, it is assumed that they are first or 
second child. For them, eligibility is not limited to single or couple households. They may rather 
have their own children who are eligible to child benefits, too. 

2.5.2  Unemployment Benefits I (bunct_de) 

Unemployment  benefits  I  are  contributory  benefits,  which  means  that  eligibility  and  benefit 
amounts depend on the amount and time for which contributions were made. As contributions are 
not observed in the data, they are approximated by observed information. 

  Definitions 

Approximation of contribution history is applied differently for three groups: 1) those who are 
currently employed and not in receipt of unemployment benefits I, 2) those currently unemployed 
and in receipt, and 3) those unemployed, but not in receipt. Unit of analysis is the individual. 

  Eligibility Conditions 

Unemployed individuals, under the age of 65, who are generally able to work at least 15 hours 
per week, are entitled to unemployment benefits I in case they contributed to the unemployment 
insurance for at least 12 months within the two years preceding the unemployment spell, meaning 
they were employed during that time. 

 

Income Test 

Unemployment benefits I are contributory benefits. There is no income or wealth test, in the sense 
of a means test, to these benefits. But see the restrictions for additional earnings from employment 
under Benefit Amount. 

  Benefit Amount 

They amount to 60% of previous net earnings for childless individuals and to 67% for individuals 
with at least one child in terms of income tax law. Recipients are allowed to work up to 15 hours 
per week to top up benefits. Earnings from employment of up to 15 hours per week reduce the 
amount of benefits paid; an allowance for earnings of 165 Euro per month is granted. Earnings 
above this allowance reduce the benefit level. 

  Benefit Duration 

The duration of entitlement to “unemployment benefits I” depends on the individual’s age and 
number of months contributions were made in the previous five years. Generally, contributions 
made for 12 months entitle to six months of benefits, whereas benefits are paid for a maximum 
of 12 months for individuals who paid contributions for 24 months. People aged between 50 and 
55 are eligible to a maximum of 15 months benefit receipt for 30 months of contributions. For 
individuals who are aged 55 or older, 16 months of contributions entitle to 8 months of receipt, 
20 months of contributions entitle to 10 months of receipt, and 36 months of contributions entitle 

27 

 
 
EUROMOD Country Report – GERMANY 

to 18 months. People aged 58 or older are entitled to 24 months of benefit receipt in case they 
contribute for 48 months. Table 2.4.3 provides a summary of the benefit rules: 

Table 2.4.3 Characteristics of the unemployment benefit 

2021-2024 
Min of 12 months over the last 2 years 
Less than 65, able to work 15 hours per week, no receipt 
of old-age pension 
n/a 

Net (of income tax and employee SIC) earnings  
60% of previous net earnings for childless individuals 
and 67% of previous net earnings if with at least 1 child  
The health insurance contribution (tscot_s) is paid with 
the benefit  
n/a  
The ceiling is applied on previous gross earnings up to 
7,550 (West Germany) or 7,450 (East Germany) Euro 
per month in 2024  
6 months (if contributed for 12 months) up to 12 months 
(if contributed for 24 months) 
8 months (if aged 55+ and contributed for 16 months), 10 
months (if aged 55+ and contributed for 20 months) 
(other special cases are not simulated as entitlements 
exceeds 12 months) 
Enters the ‘progression clause’ income list 
n/a 

Eligibility  Contribution period 

Other conditions 

Eligibility of self-employed 

Payment 

Contribution base 
Basic amount 

Additional amount 

Floor 
Ceiling 

Duration 

Standard (in months) 

Special cases (in month) 

Subject to  Taxes 

SIC 

  EUROMOD modelling 

The  main  limitation  for  simulation  of  contributory  unemployment  benefits  is  the  fact  that  the 
contribution history is not observed in the data. Thus, contributions made have been approximated 
with the number of months ever employed (liwwh). Benefit duration is imputed according to the 
number of months ever in work and the rules for duration (see Benefit Duration). All those with 
36 months and more, who are aged 55 and older, get the maximum duration of 18 months imputed. 
However,  as  duration is only  simulated  for  one  year,  months  of  entitlement  are  capped  at  the 
observed  number  of  months  spent  in  unemployment  (or  the  number  of  months  benefits  were 
received, in case this is larger). 

Then,  the  contribution  history  is  simulated  for three groups  of  potential  recipients.  Generally, 
observed  months  contributed  (liwmy)  are  aggregated  up  over  the  entire  qualifying  period  (24 
months).  1)  For  those  employed  and  in  receipt  (bunct>0),  aggregated  observed  months  are 
applied. This means it is assumed that they have contributed, i.e. they have been employed, over 
the entire last 24 months. 2) For those unemployed and not in receipt (lunmy_s>0 & bunct=0), it 
is assumed that they have not contributed the minimum requirements for any receipt and they get 
zero months imputed. 

Based  on  simulated  contribution  histories  and  spell  durations,  benefit  amounts  are  simulated. 
Eligibility  in  general  is  conditioned  on  minimum  contributions  (liwmy_s),  age  in  band  of 
minimum 18 and maximum 65, no receipt of old-age pensions (poa), and a maximum of 15 hours 
worked per week (lhw). Now the entitlement basis is applied. As it is not observed, a proxy for it, 

28 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROMOD Country Report – GERMANY 

which has been generated by inverting the benefit function for several contributory benefits, is 
applied (i_ntpy, also see Section 3.3.4). This proxy is applied for all individuals. 

Based  on  the  entitlement  basis,  the  thresholds  for  additional  earnings  from  employment  are 
considered. For those individuals earning less than the threshold (165 Euro per month), the benefit 
amounts  result  from  applying  the  respective  benefit  rate  (60%  for  the  childless  and  67%  for 
parents)  to  the  entitlement  basis.  And,  for  those  who  earn  more  than  the  threshold,  income 
exceeding the threshold is withdrawn. Finally, simulated benefit amounts are averaged per month, 
applying the simulated spell duration in months (bunmy_s). 

2.5.3  Disability Pension from the Statutory Accident Insurance (pdiss_de) 

Individuals insured in the statutory accident insurance – these are all employees – are eligible to 
disability pensions from the statutory accident insurance if consequences of an accident severely 
reduce their earnings capacity. Contributions are paid for by the employers. 

  Definitions 

In case of a loss of the entire earnings capacity, a pension is paid that amounts to two thirds of 
annual individual earnings. This is assumed to be the case if individuals for whom benefit receipt 
is observed (i_ntpy>0) work zero hours per week (lhw=0). For those in receipt who work non-
zero hours (lhw>0), the earnings capacity is assumed to be only partly reduced, according to the 
level of lhw. Unit of analysis is the individual. 

  Eligibility Conditions 

Recipients  should  fulfil  the  following  conditions:  not  to  be  civil  servants,  have  some  level  of 
disability, and have some working history (liwwh>0). Moreover, they should have no receipt of 
unemployment benefit I (bunct_s=0), should be in receipt of any disability benefit (pdi>0) but 
not in receipt of pensions for reduced ability to work (pdi00=0). It is assumed that they suffer 
from reduced earnings capacity due to an accident if the above mentioned criteria are fulfilled. 
Conditioning on the working history (liwwh>0) is a proxy for eligibility to disability pensions. It 
is  assumed  that  individuals  who  have  ever  worked  before  have  been  insured  by  the  statutory 
accident insurance right before the spell started. 

 

Income Test 

Disability pensions are contributory benefits. There is no income or wealth test, in the sense of a 
means test, to receipt of these benefits. 

  Benefit Amount 

The amount of disability pensions from the statutory accident insurance depends on the degree of 
reduction in ability to work. This degree of reduction shall be approximated by the number of 
weekly  hours  a  recipient  works,  while  in  receipt.  If  this  is  zero  hours  (lhw=0)  the  earnings 
capacity is assumed to be reduced entirely and eligible individuals receive a full pension of 67% 
of their entire previous-year net employment income. If they work non-zero hours (lhw>0) the 
earnings capacity is assumed to be only partly reduced and a partly pension is paid in accordance 
to the remaining level of earnings capacity (factor of 1-lhw/30). It is assumed that 30 hours and 
more (lhw=>30) is full-time work, which means that recipients working 30 hours or more per 
week are assumed to have unaffected earnings capacity and receive a pension of zero. 

29 

 
 
EUROMOD Country Report – GERMANY 

  EUROMOD modelling 

The main problem when simulating contributory disability benefits from the statutory accident 
insurance is that neither the contribution history, nor the entitlement basis that determines the 
benefit  amount,  nor  the  degree  of  disability,  are  observed  in  the  data.  While  the  contribution 
history  and  the  disability  level  have  been  approximated  with  the  help  of  other  observed 
information, for the entitlement basis, more needs to be done. Pre-spell net employment income 
has been approximated by inverting the benefit function for several contributory benefits (i_ntpy, 
also  see  Section  3.3.4).  Furthermore,  in  order  to  avoid  double-counting  of  benefits,  disability 
pensions from the accident insurance can only be simulated for individuals aged up to 65. The 
reason  for  this  is  that  in  the  input  dataset  disability  pensions  from  the  accident  insurance  for 
individuals  aged  65  and  older  are  part  of  old-age  benefits  instead  of  disability  benefits.  The 
solution  chosen  to  overcome  this  problem  is  that  we  use  simulated  disability  benefits  for 
individuals younger than 65 whereas we use observed disability benefits for those individuals 
older than 65. 

2.5.4  Education Benefits (bed_de) 

Education benefits are means-tested benefits for students entering higher education according to 
the German law for education, “Bundesausbildungsförderungsgesetz (BaFöG)”. 

  Definitions 

The means test refers to income and wealth of the students and in most cases also of their parents, 
as well as the number of students in the household who are eligible to education benefits. The unit 
of analysis thus is the individual as well as the household. 

  Eligibility Conditions 

All students entering higher education before the age of 45 are generally eligible to education 
benefits.  

 

Income Test 

Education benefits are means-tested benefits. The benefit level depends on income and wealth of 
the  recipient  as  well  as  on  income  of  the  recipient’s  spouse  and  in  most  cases  also  parents. 
Moreover, it depends on the presence of siblings in the household as well as their age and income. 
Parents’ income is not taken into account for students older than 30 years old, for students that 
have worked at least 5 years after the age of 18 and for students that have worked for a certain 
amount of time after they received a professional qualification previous to the current education. 
The  relevant  income  is  generally  the  individual  taxable  income  (il_taxy,  added  income  from 
capital),  added  widows’  and  orphans’  pensions,  minus  an  allowance  for  social  security 
contributions, minus actual taxes paid and minus an allowance for income-related expenses. The 
allowance  for  social  security  contributions  differs  depending  on  whether  the  contributor  is 
compulsory insured by the pension insurance or not. For individuals with earnings from marginal 
employment,  the  allowance  amounts  to  37,7% for  the  years  2021  and  2022  and  to  38%  since 
August 2022 (simulated from 2023 on). For individuals that are insured by the statutory pension 
insurance, the allowance for them amounts to 21,3% for the years 2021 and 2022 and to 21.6% 
since  August  2022  (simulated  from  2023  on).  Last,  for  pensioners  the  allowance  amounts  to 
15,5% for the years 2021 and 2022 and to 15.9% since August 2022 (simulated from 2023 on). 
In  all  cases, these allowances are  capped  by  a  maximum  amount,  which is  8,500,  14,600  and 
25,500 Euro for the years 2021 and 2022 and 9,000, 15,100 and 27,200 Euro since August 2022 
(simulated  from  2023  on).  The  allowance  for  income-related  expenses  corresponds  to  the 
allowance from personal income taxation (1,230 Euro per year, see Section 2.8.1). 

30 

 
 
EUROMOD Country Report – GERMANY 

There are moreover lump-sum allowances on own income and parents’ income. If the parents of 
the recipient are married, the income allowance for them is up to 1,890 Euro in 2021, 2,000 Euro 
in 2022 and 2,415 Euro in 2023. For single parents, or parents married who live with a partner 
(not the mother or the father of the recipient), the allowance is 1,260 Euro in 2021, 1,330 Euro in 
2022 and 1,605 Euro in 2023. Moreover, the amount of 555 Euro for 2020, 570 Euro for 2021, 
605  Euro  in  2022  and  730  Euro  for  2023  and  2024  is  added  to  the  income  allowance  of  the 
recipient’s parents for each non-eligible sibling.  

The student’s own income allowance is 290 Euro per month for the years 2020-2022 and 330 for 
2023 and 2024, plus 555 Euro for each own child in 2020, 570 Euro in 2021, 605 Euro in 2022 
and 730 Euro in 2023 and 2024. These allowances reduce the relevant income of the recipients, 
their  parents,  and  their  partners.  Incomes  of  parents  and  partners  of  married  spouses,  after 
accounting for all allowances, are considered at the benefit amount with 50% of the income only. 
The resulting relevant income is divided by the number of children eligible for education benefits. 

In addition, there is a wealth test. Wealth holdings, after subtracting allowances, are generally 
subtracted from the benefit amount. The assets allowance for single students amounts to 7,500 
Euro for the years 2017-2020 and 8,200 Euro for 2021 and 2022. Since 2023 the wealth allowance 
has been increased significantly to 15,000 Euro for individuals below the age of 30 and to 45,000 
Euro for individuals aged 30 and older. For the spouse of a married student up to 2,300 Euro, plus 
2,300 Euro for each own child of assets are not considered for the wealth test in 2023 and 2024.  

  Benefit Amount 

The basic amount for university students who do not live with their parents is 744 Euro in 2020 
and 752 Euro in 2021 and 2022 and 812 Euro in 2023 and 2024. This basic benefit rate is reduced 
if income exceeds the income thresholds (see Income Test). This basic rate includes allowances 
for housing expenses. The rate for housing expenses depends on the living conditions. Students 
living on their own get an increased rate of 325 Euro for the years 2020-2022 and 360 for the year 
2023 and 2024. For non-university students living alone there are lower rates. 

For recipients aged 25 and older, the basic rate is topped up by a lump-sum payment for health 
and long-term care insurance which sums up to 109 Euro per month for the years 2020-2022 and 
122 Euro for the year 2023 and 2024. 

High school students do not need to repay any of the benefits. However, university students get 
half of the benefits in form of an interest-free loan that has to be paid back under certain conditions 
after education is finished. 

From 2009, there exists an add-on to the general benefit rate for students with children. If the 
recipient has an own child, aged younger than 10 years and living in the household of the student, 
the regular benefit rate is topped up by 113 Euro. From the second child on, aged younger than 
10 years, the top up is increased by an additional 85 Euro. Since the year 2017 the benefit rate is 
topped up by 130 Euro for each own child under the age of 10 years. From August 1, 2019 on an 
add-on of 140 Euro is granted for children younger than 14 years, which is modelled from 2020 
on. From 2023 on, the child supplement is 160 Euro.  

  EUROMOD modelling 

Education benefits for students are granted for two groups of students in Germany. The first group 
still lives with their parents. For this group, the relevant information for determining eligibility is 
(partly) observed, or can be estimated, i.e. their parents’ income and wealth. The second group of 
students  does  not  live  with  their  parents.  The  receipt of  education  benefits  for  students  living 
without their parents has been conditioned on observed positive education benefits.  For them, 
relevant information on income and wealth of their parents is not observed. This information, 

31 

 
 
EUROMOD Country Report – GERMANY 

however,  is  crucial  for  determining  eligibility,  as  for  many  applicants,  eligibility  is  rejected 
because  their  parents  have  income  and/or  wealth  above  the  thresholds.  Therefore,  for  those 
students for which we observe the receipt of education benefits in the data, income and wealth of 
their parents has been imputed. This is an imputation of a mean income. The imputed income is 
the mean after-SSC market income of married couples, aged between 46 and 59 (which is the 
mean age of parents with kids older than 18 +/- one SD), living in a two-person household, as 
observed in the EU-SILC micro data for Germany.  

In the income test, also assets of the recipients and their parents are relevant. Imputed financial 
assets (afc) have been applied for this means test. The stock of assets that remains after applying 
all allowances has been averaged to a month (afc/12) in order to account for asset liquidations 
and make it comparable to monthly incomes. Housing expenditures have been accounted for at 
the means test (xhcrt, also see Section 3.3.5). 

As explained above, all students entering university education before the age of 45 are eligible 
for education benefits. However, in EU-SILC data we do not observe when students have entered 
education. Therefore, eligibility is granted in terms of current age instead of age at the beginning 
of studies. Furthermore, education benefits are only paid for the regular number of semesters that 
a study programme is supposed to last. Given that we do not observe this information in EU-SILC 
data, EUROMOD ignores this eligibility criterion. 

2.5.5  Long-Term Care Benefits from Statutory Accident Insurance (pdiac_de) 

Starting from release H2.0+ onwards, this policy has been dropped. New information regarding 
the benefits included in EU-SILC has indicated that these benefits are not part of the input dataset. 

2.5.6  Sickness Benefits (bhl_de) 

Individuals  insured  by  the  statutory  health  insurance  are  entitled  to  sickness  benefits 
(Krankengeld  der  gesetzlichen  Krankenversicherung).  Individuals  privately  insured  can 
contribute  to  an  additional  insurance  that  entitles  them  to  sickness  benefits  too  (private 
Pflegezusatz- und Krankentagegeldversicherung). 

  Definitions 

All individuals who are not civil servants are assumed to be insured either in the statutory or in a 
private health insurance, depending on their income. It is assumed that all individuals, for whom 
private insurance is simulated, also contribute to this additional health insurance. Civil servants 
are  not  entitled  to  these  sickness  benefits,  as  they  are  covered  by  a  separate  system  (sickness 
benefits for civil servants are not simulated). Unit of analysis is the individual. 

  Eligibility Conditions 

Individuals  need  to  fulfil  the  status  of  sickness,  which  is  checked  for  in  the  simulation  by 
conditioning on the variable for economic status (les=8), i.e. individuals report being in the status 
“sick or disabled”. They should not be civil servants, and they should be employed for less than 
12 months during the observed year (liwmy<12), which is supposed to indicate that there is a 
relevant  spell  of  sickness.  They  are  further  categorised  in  either  statutory  or  private  health 
insurance, in self-employed and not self-employed, and in employed or unemployed. 

 

Income Test 

Sickness benefits are contributory benefits. There is no income or wealth test, in the sense of a 
means test, to these benefits. However, assignment to statutory and to private health insurance is 

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determined  by  pre-spell  after-social-contributions  income  from  employment  (i_ntpy,  also  see 
Section 3.3.4) and the threshold for statutory health insurance. 

  Benefit Amount 

The  benefit  amount  depends  on  the  type  of  health  insurance,  statutory  or  private,  and  on  the 
benefit  entitlement  basis,  which  is  previous-year  after-social-contributions  income  from 
employment.  The  minimum  benefit  rate  for  the  statutory  health  insurance  is  70%  of  the 
entitlement basis, and for the private health insurance it is 80%. This minimum rate applied to the 
benefit entitlement basis determines the benefit level. 

The resulting benefit amount moreover differs for those employed and those unemployed. It is 
also different for the self-employed. Generally, the health insurance has to pay the employee share 
of  social  security  contributions  on  the  benefit  amount.  For  those  who  are  not  self-employed, 
contributions to statutory pension insurance for employees (9.3% in 2021-2024), to long-term 
care insurance (1.525% in 2021-2023 and 1.7% in 2024), and to unemployment insurance (1.2% 
in 2021-2022 and 1.3% in 2023-2024) are paid and thereby reduce the benefit amount. For the 
self-employed,  only  contributions  to  statutory  pension  insurance  are  subtracted,  however,  the 
entire rate assuming the self-employed have to pay the employer’s share as well (18.6% in 2021-
2024). For the unemployed, the social security contributions are covered by the health insurance, 
and thus benefit amounts are not reduced. 

  EUROMOD modelling 

Severity of the illness is not observed. Thus, for all entitled individuals only the minimum benefit 
level (70% for statutory health insurance and 80% for private health insurance) is assumed. The 
benefit  entitlement  basis  is  approximated  differently  for  those  employed  and  for  those 
unemployed. For those employed, i.e. those who are not in receipt of unemployment benefits I 
(bunct_s=0), the general proxy for pre-spell income is applied (i_ntpy, also see Section 3.3.4). 
For those in receipt of unemployment benefits I (bunct_s>0), it is assumed that this is receipt 
equals the entitlement basis and it is applied to determine the benefit amount. 

2.5.7  Citizen’s benefit and Social Benefits (bunnc_de and bsaot_de) 

Citizen’s benefit are means-tested benefits to cover the needs of people who are not employed 
and not in receipt of contributory unemployment benefits (or whose contributory unemployment 
benefits  do  not  entirely  cover  their  basic  needs).  Up  to  the  year  2022,  social  benefits  were 
supposed  to  capture  people  who  live  together  with  recipients  of  citizen’s  benefit  (then 
unemployment  benefits  II)  but  who  are  themselves  not  eligible to  them,  typically  children,  to 
cover their needs as well. Although, social benefits have been incorporated into citizen’s benefits 
from  2023  on,  both  benefit  components  are  still  simulated  separately  for  intertemporal 
comparisons. 

  Definitions 

Citizen’s benefit are means tested with respect to income and wealth. Means are determined by 
the needs of the “community” (Bedarfsgemeinschaft), which includes – if applicable – the partner 
(married or not, but living in the same household) and dependent children up to 25 years of age. 
This is the unit of analysis. 

  Eligibility Conditions 

All individuals aged 15 or older, but younger than 65, who are able to work for at least three hours 
per  day  are  eligible  for  citizen’s  benefit.  Students  eligible  to  education  benefits  and  old-age 
pensioners  are  not  eligible.  Unemployment  is  no  requirement  for  entitlement,  and  there  is  no 

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limitation for the hours worked. However, unemployment benefits I may be received at the same 
time.  Dependent  children  need  to  be  aged  younger  than  25,  not  be  married  and  do  not  have 
earnings that cover their basic needs in order to be eligible to social benefits. They need to live in 
households receiving citizen’s benefit. 

 

Income Test 

Citizen’s benefits are means tested with respect to income and wealth of the unit of analysis. This 
means  that  the  household’s  income  and  wealth  are considered  for the  determination  of  needs, 
except for some allowances. This is usually done by a means test regarding income and wealth. 

Relevant income: The income of the household that is relevant for the means test is disposable 
household income (il_dispyc), including market income from employment, pension income, most 
benefits (except for social assistance, housing benefits and additional child benefits), as well as 
social security contributions and income tax.7  

Income  allowances:  there are  allowances  granted  for  earnings  from  employment.  Benefits  are 
unaffected by an additional (gross) employment income of 100 Euro per month. Until June 2023, 
employment  income  between  101  and  1000  Euro  reduced  benefits  at  a  rate  of  80%,  income 
between 1000 Euro and 1,200 Euro at a rate of 90% (1,500 Euro for households with children). 
Above this level, earnings  were  deducted at 100%. From July 1st 2023, thresholds have been: 
employment income between 101 and 520 Euro reduces benefits at a rate of 80% and income 
between 521 Euro and 1000 Euro is reduced at a rate of 70%. Above 1000 Euro the calculation 
stays the same. This is modelled from 2024 on. 

Wealth allowances: wealth allowances depend on the year of birth of each individual. From 2008 
(incl) up to 2022, the wealth allowances deferred for four groups: those born before 1948, those 
born between 1948 and 1958, those born between 1958 and 1963, and those born after 1963. For 
each  individual,  a  basic  allowance  of  750  Euro  for  claims  from  old-age  provisions  per  year 
applied. For each life year, the wealth allowance increased by 520 Euro for those born before 
1948 and 150 Euro for those born thereafter. However, this allowance  was at minimum 3,100 
Euro per year. The maximum amount the allowance could reach was 33,800 Euro for those born 
before  1948;  9,750  Euro  for  those  born  between  1948  and  1958;  9,900  Euro  for  those  born 
between 1958 and 1963; and 10,050 Euro were granted for those born after 1963. The allowance 
for minors was 3,100 Euro. In addition, for every eligible member of the “community” (usually 
the household) there was an allowance of 750 Euro per person for basic purchases.  

From  2023  on,  wealth  allowances´  changes  and  age  differentiation  are  abolished.  In  general, 
wealth  allowance  now  amounts  to  15,000  Euro  per  person  in  the  “community”  and  is  also 
transferable  among  members.  Furthermore,  during  the  first  year  of  benefit  receipt  the  wealth 
allowance increases to 40,000 Euro for the recipient and 15,000 Euro for each additional member 
of the community. 

If the wealth of the household is greater than the permitted allowances, then the household loses 
its entitlement to this benefit. The relevant income of the household minus the income allowances 
cannot exceed the overall benefit amount described below for the household to receive the benefit. 
If the relevant income minus the allowances is smaller than the overall benefit amount, then the 
benefit amounts to the difference between the two.  

7 Here, all benefits that are simulated earlier in the spine than citizen’s benefit are applied in the simulated 
amount, while relevant benefits that are not simulated at all (ils_pen, byr, ysv, bunot, buntr), are applied 
in its observed amount. 

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  Benefit Amount 

The maximum benefit amount is made up of the basic benefit rates (which vary with age), actual 
housing  and  heating  costs  and,  if  applicable,  health  and  long-term  care  social  security 
contributions. 

Table 2.4.8 Basic benefit rates (in Euro per month) 

Single Adult 

Adult in a Couple (per Person) 

Dependent child aged 0 to 5 

Dependent child aged 6 to 13 

Dependent child aged 14 to 17 

Dependent child aged 18 to 25 

2021 

2022 

2023 

2024 

446 

401 

283 

309 

373 

357 

449 

404 

285 

311 

376 

360 

502 

451 

318 

348 

420 

402 

563 

506 

357 

390 

471 

451 

In addition to the basic benefits, costs for actual housing and heating (as long as reasonable) are 
also covered. 

This  benefit  also  foresees  benefits  to  cover  additional  needs  of  the  household  (Mehrbedarfe), 
which are granted in specific situations such as pregnancy, lone parenthood as well as disabilities 
and  sicknesses.  In  EUROMOD,  only  benefits  to  cover  additional  needs  because  of  lone 
parenthood are included (as there is no information on pregnancies and on medical and nutrition 
expenses incurred by people with disabilities or sicknesses which are not covered by the regular 
health and long-term care insurance). Additional benefits for lone parents amount from 12% to 
60% of the single adult basic rate, depending on the number and ages of the dependent children 
living in the household. These rates have been constant over the years. Table 2.4.8.2 provides a 
summary of the benefit rules: 

Table 2.4.8.2 Characteristics of the citizen’s benefit 

Eligibility  Contribution period 

Other conditions 

Eligibility of self-employed 

Payment 

Contribution base 

Basic amount 
Additional amount 

Floor 
Ceiling 

Duration 

Standard (in months) 
Special cases (in month) 

Subject to  Taxes 

SIC 

 since 2023 
n/a 
Adults: aged 15+ and less than 65, able to work for at least 
3 hours a day; children within the assessment unit: aged 
less than 25, not married and little/no earnings; assessment 
unit should fulfil an income and wealth test 
The same as for employed 

No contribution base. There is an income and wealth test. 
Income and wealth allowances are applied. 
Basic benefit rate (see Table 2.4.8) 
Costs for actual housing and heating are covered as well as 
additional needs of the household due to lone parenthood  
n/a 
Employment income between 101 and 520 Euro reduces 
benefits at a rate of 80%; between 520 and 1,000 Euro at a 
rate of 70%; above this level, at 100% 
until eligibility no longer fulfilled 
n/a 

No 
No 

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  EUROMOD modelling 

As mentioned above, this benefit is meant to cover heating costs too. Given that we do not observe 
heating costs in the EUROMOD input database, we apply average heating costs by household 
size from the German Socio-Economic Panel.  

Actual housing costs are covered by the benefit as long as they are reasonable. Given that housing 
costs vary a lot depending on the location of the flat, without further geographical information on 
where the household is located is not possible to apply a meaningful maximum. Therefore, in 
EUROMOD the totality of housing costs is covered for every recipient of this benefit. 

We do not model if recipients are in the first year of benefit receipt such that we assume that 
wealth allowance amounts to 15,000 Euro per person in general. 

Social benefits are still simulated separately (bsaot_de). To receive the total benefit amount of 
citizen’s benefits for one household, one should calculate the sum of bunnc_de and bsaot_de. 

BTA and BCA extensions are off for the bunnc_de policy, so the baseline model neither adjusts 
for non-take-up of the benefit nor calibrates its receipt, but the user can activate them if necessary. 
See section 2.4 for technical details on both extensions and their interactions.  

Users can enable the necessary extensions in Country Tools/Set Switches. For proper functioning, 
the extensions require the following inputs:  

  BTA:  The  estimated  take-up  rate  of  the  benefit  should  be  set  as  the  value  of  the 
$bunnc_BTA_rate8 constant in the model. Currently, the value is set to 1, indicating no 
adjustment for non-take-up.  

  BCA: The aggregate expenditure needs to be filled out in the External Statistics table, so 
that  the  calibration  rate  ($bunnc_targetBCA_amt)  is  computed  accordingly.  Data  are 
currently available for the years 2018-2023; given the absence of information for 2024, 
the calibration rate is not computed within the 2024 system, but the one computed within 
the 2023 system is used instead. For the modelling of reforms, the 2024 system should 
be used in order to allow for variation in the number of beneficiaries (hence expenditure): 
beneficiaries will change when the eligibility conditions change by applying the share of 
2023 to the new pool of eligible units. If previous systems were used for reforms, total 
expenditure would remain constant irrespective of the reform applied, since the model 
would always stick to the existing external statistics.  

2.5.8  Maternity Leave Benefits (bmact_de) 

Maternity-leave  benefits  are  contributory  benefits  paid  for  by  the  statutory  health  insurance 
system for six weeks before the child’s birth and eight weeks thereafter in order to compensate 
foregone income from employment. 

  Definitions 

This time frame of benefit receipt is called the time of maternity leave, where mothers are not 
allowed to work by law. Receipt is related to mothers, but eligibility is related to a baby in the 
household. Thus, the unit of analysis is sometimes the individual and sometimes the family. 

8 Estimation of non-take-up from external source: https://doku.iab.de/discussionpapers/2019/dp0619.pdf 

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  Eligibility Conditions 

All mothers who are employed and insured by the statutory health insurance, at the time when the 
time of maternity leave starts for them, are eligible to maternity-leave benefits. No contributions 
of a specific amount, or for a specific time, need to be made. The only differentiation that is made 
is between full-time and part-time employment. 

 

Income Test 

Maternity leave benefits are contributory benefits. There is no income or wealth test, in the sense 
of a means test, to these benefits. However, there is a differentiation made at the benefit amount 
between part-time and full-time employment. This is done applying a proxy for pre-spell income 
from employment (i_ntpy, also see Section 3.3.4). 

  Benefit Amount 

The level of benefits amounts to a maximum of 13 Euro per day, which is 390 Euro per month. 
Benefits are reduced if employment was less than full time before the spell down to 210 Euro per 
month. These rates have been constant over the years 2020 to 2024. These amounts are multiplied 
by a factor of 3.5/12 when aggregating up to year to account for the fact that maternity leave 
benefits are only granted for a time of 3.5 months. 

  Subject to taxes/SIC 

Exempt  but  enters  the  progressivity  clause  (i.e.  it  is  itself  not  taxed  away,  but  contributes  to 
determining which tax rate is applied to the taxable income). 

  Take up 

Almost 100%. 

  EUROMOD modelling 

In  the  simulation,  the  identification  of  eligible  mothers  suffers  from  the  problem  that  eligible 
mothers cannot easily be identified before they gave birth. Eligibility conditions on female gender 
(dgn=0), being a parent, not working (liwmy=0), and the presence of dependent children aged 
one year or younger in the family. By the latter condition, on the one hand eligible mothers that 
did not give birth to their first child yet are excluded, although they should be included. But, on 
the other hand mothers who are not eligible anymore because their giving birth is already more 
than eight weeks ago are included, although they should be excluded. This inevitable error made 
in the simulation needs to be kept in mind when comparing recipient rates and aggregate amounts 
to external statistics. 

Also the employment level before the spell is not observed, but it can be approximated by months 
ever in work (liwwh), a proxy for pre-spell income (i_ntpy, also see Section 3.3.4), and current 
receipt  of  unemployment  benefits  I  (bunct_s).  Those  who  have  either  zero  pre-spell  income 
(i_ntpy=0),  or  zero  months  ever  in  work  (liwwh=0),  or  receipt  of  unemployment  benefits  I 
(bunct_s>0) are assumed to have been unemployed before the spell. For them, benefits according 
to  part-time  employment  are  assigned.  Those  with  some  months  ever  in  work  (liwwh>0),  no 
receipt of unemployment benefits (bunct_s=0), and some non-zero pre-spell income (i_ntpy>0), 
are assumed to have been employed before the spell. If their pre-spell income exceeds the average 
employment  income  of  women  working  30  hours  per  week,  as  observed  in  the  data, they  are 
assumed to have been working full-time before the spell, and benefit amounts for full-time work 
are imputed. In case pre-spell income is lower, part-time work is assumed and benefit amounts 
follow accordingly. 

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Resulting  benefits  (bmact_s)  are  allocated  to  the  mothers  in  the  household.  This  must  be 
consistent with the allocation of parental leave benefits (bplct_de), so that these benefits can be 
withdrawn from each other. 

2.5.9  Parental Leave Benefits (bplct_de) 

Parental-leave  benefits  (Elterngeld)  were  implemented  in  2007  and  substituted  the  formerly 
applied  “Erziehungsgeld”.  While  “Erziehungsgeld”  was  a  lump-sum  transfer,  parental  leave 
benefits are conditional on the previous labour earnings. They are non-means-tested benefits that 
replace a fraction of parents’ foregone net labour earnings in case they suspend employment due 
to the birth of a child. The latest reform entered into force in July 2016 and allows parents the 
choice between the benefit the way it was defined up to then and the possibility to receive half 
the previous benefit but for a period twice as long (Elterngeld Plus). 

  Definitions 

Receipt can be related to mothers or to fathers because both are generally eligible to parental leave 
benefits.  Eligibility  is  also  related  to  a  baby  in  the  household.  Thus,  the  unit  of  analysis  is 
sometimes the individual, sometimes the couple of partners in the household and sometimes the 
family. 

  Eligibility Conditions 

Parental-leave  benefits are  paid  – in  addition to  child  benefits  –  for  a time  frame  of  up  to  12 
months following the birth of the child. Benefit duration can be prolonged for another two months 
if parents share parental-leave time such that each of them suspends work for at least two months. 
Alternatively, to suspension, part-time work of up to 30 hours per week is allowed. 

 

Income Test 

There is no income or wealth test, in the sense of a means test, to these benefits. However, there 
is a threshold of taxable income of the relevant tax period before the birth of the child above 
which  parents  do  not  receive  any  parental  benefits.  Until  31st  of  March  2024  this  threshold 
amounted to 300,000 Euro per year for couples and 250,000 Euro per year for lone parents. From 
April 2024 onwards, the income threshold is lowered to 175,000 Euro per year for both, couples 
and lone parents. 

  Benefit Amount 

The minimum level of parental-leave benefits is 300 Euro per month, which is paid in case the 
recipient  was  unemployed  before  the  child’s  birth  or  net  income  was  below  300  Euro.  The 
maximum benefit level is 1,800 Euro per month, which is paid if net income was 2,770 Euro or 
more. In between, benefits generally amount to 65% of net income, considerably more for low 
income and slightly less for high incomes. These rates have been constant over the years 2021 to 
2024. (When someone was in “Kurzarbeit” due to COVID-19, this will not be taken into account).  

  Subject to taxes/SIC 

Exempt from both SIC and taxes but enters the progressivity clause (i.e. it is itself not taxed away, 
but contributes to determining which tax rate is applied to the taxable income). 

  Take up 

Very high (almost 100%, no concrete figures available). 

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  EUROMOD modelling 

Eligibility is conditioned in the simulation on number of months in work during the observed year 
to be less than 12 (liwmy<12). Thereby an error is inevitable, because it is not reported which part 
of these months out of work actually belong to a spell of parental-leave benefit receipt. 

Moreover, it is not observed who of the two parents is currently in receipt of benefits, the mother, 
or  the  father,  even  in  case  a  receipt  of  the  couple  if  observed.  Therefore,  the  simulation 
differentiates between the cases that the mother works more hours than the father and the opposite 
situation. It is accounted for the fact that the mother is in receipt of parental-leave benefits for 
some months in any case, whereas the father can opt to take the father months or not. It is assumed 
that in case the mother is observed working more hours (lhw), than the father takes some of the 
father months so that the average joint income of the spouses is the relevant income for benefit 
entitlement. However, in case the father works more hours, which is the dominant case in the 
data,  it  is  assumed  that the  mother  is  in  parental  leave  most  time  of the  year  so  that  only  her 
income determines the amount of parental leave benefits. The respective relevant pre-spell income 
is determined by the general proxy for pre-spell income for contributory benefits (i_ntpy, also see 
Section 3.3.4). 

Mothers working zero hours (lhw=0) with a pre-spell income below 300 Euro per month get a 
minimum  benefit  amount of  300  Euro  per  month assigned,  while those  with  pre-spell  income 
above  300  Euro  get  the  regular  rate  of  67%  of  their  pre-spell  income  if  it  is  greater  than  the 
minimum amount, but at maximum they get the maximum amount of 1,800 Euro. In any case, 
maternity-leave benefits received are deducted from parental-leave benefits. 

Mothers working non-zero hours (lhw>0), but less than the maximum allowed number of hours 
(lhw<=30), get benefits assigned according to their pre-spell income. The standard rate is applied 
(67%), within the range of minimum and maximum benefit amounts, and maternity-leave benefits 
received are deducted. 

If mothers work more than the maximum hours allowed (lhw>30), but the fathers work less than 
maximum, benefits are assigned to the fathers. The pre-spell income of the fathers is relevant in 
this case. Benefit amounts are assigned accordingly, within minimum and maximum range, and 
maternity benefits are accounted for. 

Generally, parental-leave benefits are simulated after maternity-leave benefits in the EUROMOD 
spine, in order to account for the fact that maternity-leave benefits are deducted from parental-
leave benefits in case of receipt for both. 

Elterngeld Plus is not simulated as there is no information in the data whether people opt for this 
option.  

2.5.10  Housing benefits (bho00_de) 

  Definitions 

Housing  benefits  (Wohngeld)  provide  financial  help  for  covering  part  of  the  costs  of 
accommodation and are means-tested. 

  Eligibility Conditions 

Eligibility is based on household income. Additionally, recipients of citizen’s benefit (bunnc_s), 
old-age social assistance (bsaoa_s) and basic social assistance (bsa00_s) cannot receive housing 
benefits (and vice versa). Some individuals may qualify for both benefits, in which case they have 
to decide for one of them.  

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 

Income Test 

The relevant income for receiving housing benefits (Y in the formula below) is made up of all 
sources  of  gross  income  (including  contributive  benefits)  with  some  deductions  dependent  on 
whether paying contributions and/or income tax. The deduction amounts to 10% if either health 
and long-term care insurance contributions, or pension insurance contributions, or income taxes 
are paid. The deduction amounts to 20% for those individuals that pay health, long-term care and 
pension  contributions,  or  for  those  that  pay  income  taxes  plus  some  kind  of  social  security 
contributions. Finally, the deduction is 30% for those individuals that pay both taxes and all three 
kinds of social security contributions. Furthermore, the following quantities can be deducted in 
three cases: (1) 1,800 Euro per year for each disabled person living in the household that has 
either the maximum degree of disability or is in need of home or inpatient care, (2) 1,320 Euro 
per year per lone parent household, (3) at maximum 1,200 Euro per year per child under the age 
of 25 with own income.  

  Benefit Amount 

The  monthly  benefit  amount  (in  Euro)  is  calculated  through  the  following  formula:  1.15*[M-
(a+b*M + c*Y)*Y], where M stands for the relevant housing rent, Y for the relevant income, and 
a, b, and c are parameters that vary according to household size. The parameters a, b and c have 
been updated in 2023. 

The  relevant  housing  rent,  M,  is  computed  as  the  actual  rent  as  long  as  it  does  not  exceed  a 
maximum determined by law, which varies across municipalities. These maximum amounts were 
increased in 2023 due to the introduction of a new heating cost component as well as a climate 
component  and  remain  constant  in  2024.  The  heating  cost  component  should  compensate  for 
actual heating costs as well as increases in the price for CO2 emissions. 

If the formula above yields less than 10 Euro per month, no housing benefits are paid. 

  EUROMOD modelling 

The housing benefits law defines seven possible categories of rent prices  from 2020 on. Each 
municipality determines which category reflects its rent prices. Due to missing detailed regional 
information  in  SILC,  the  model  assumes  that  the  maximum  rent  eligible  to  be  financially 
supported by the housing benefits is that of the median price category.  

In order to grant the deduction in the case of disability, the model requires a disability of minimum 
80%. This is meant to account for the formulation used in the law “highest degree of disability or 
in need of home or inpatient care”. 

Both  housing  benefits  (bho00_s)  and  additional  child  benefits  (bchot_s)  cannot  be  received 
simultaneously  with  either  citizen’s  benefit  (bunnc_s),  old-age  social  assistance  (bsaoa_s)  or 
basic social assistance (bsa00_s). However, some individuals – especially those with own low 
market earnings and/or with children – may qualify for both, in which case the model assumes 
individuals decide for the alternative that yield the highest financial help. This correction is carried 
out at the end of the additional child benefits policy, bchot_de. 

BTA and BCA extensions are off, so the baseline model neither adjusts for non-take-up of the 
benefit nor calibrates its receipt, but the user can activate them if necessary. See section 2.4 for 
technical details on both extensions and their interactions.  

Users can enable the necessary extensions in Country Tools/Set Switches. For proper functioning, 
the extensions require the following inputs:  

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EUROMOD Country Report – GERMANY 

  BTA:  The  estimated  take-up  rate  of  the  benefit  should  be  set  as  the  value  of  the 
$bho00_BTA_rate9 constant in the model. Currently, the value is set to 1, indicating no 
adjustment for non-take-up.  

  BCA: The aggregate expenditure needs to be filled out in the External Statistics table, so 
that  the  calibration  rate  ($bho00_targetBCA_amt)  is  computed  accordingly.  Data  are 
currently available for the years 2018-2023; given the absence of information for 2024, 
the calibration rate is not computed within the 2024 system, but the one computed within 
the 2023 system is used instead. For the modelling of reforms, the 2024 system should 
be used in order to allow for variation in the number of beneficiaries (hence expenditure): 
beneficiaries will change when the eligibility conditions change by applying the share of 
2023 to the new pool of eligible units. If previous systems were used for reforms, total 
expenditure would remain constant irrespective of the reform applied, since the model 
would always stick to the existing external statistics.  

2.5.11  Social Assistance for Old-age and for Reduced Work Ability (bsaoa_de) 

Social assistance for old-age and for reduced ability to work ensures the basic needs for living for 
older people and for those individuals who are permanently fully incapacitated for work. This 
benefit is closely related to  citizen’s benefit – as the benefit amounts are identical under both 
regimes – but eligibility criteria and income test are stricter under social assistance. 

  Definitions 

Old-age social assistance and social assistance for reduced work cover individuals who are not 
eligible to citizen’s benefit because they are not able to work at least three hours per day. The unit 
of  analysis  is  the  concept  of  “community”  (Bedarfsgemeinschaft)  used  for  citizen’s  benefit 
(bunnc_de).  

  Eligibility Conditions 

Old-age social assistance: Individuals should have either 65 years of age or more, or they should 
be 18 years or older and permanently unable to work at least three hours per day to be eligible to 
old-age  social  assistance  or  social  assistance  for  reduced  work.  Generally,  recipients  cannot 
receive income from citizen’s benefit. Thus, eligibility is conditioned on not receiving citizen’s 
benefit (bunnc_s=0). 

Social assistance for reduced ability to work: Individuals need to be at least 18 but not older than 
65 and be disabled and not working (lhw=0 & liwmy=0). 

 

Income Test 

There is a means test on income and wealth for eligibility to old-age social assistance and social 
assistance for reduced work ability. There are allowances for income and wealth, which depend 
on household composition and the age of household members and are detailed below. 

Relevant  income:  Disposable  income  (including  market  income  from  employment,  pension 
income, most benefits and accounting for social security contributions and income tax), excluding 
citizen’s benefit, additional child benefit, housing benefits and disability benefits for war victims.  

9 Estimation of non-take-up from external source: 
https://econpapers.repec.org/article/palcompes/v_3a60_3ay_3a2018_3ai_3a4_3ad_3a10.1057_5fs4129
4-017-0041-5.htm  

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Income  allowances:  30%  on  earned  income,  up  to  50%  of  the  basic  benefit  rate  (see  benefit 
amount below). 

Wealth allowances: From 2017 onwards, the wealth allowance has been raised to 5000 Euro per 
adult in the household and 500 Euro per child (irrespective of their ages). 

If the wealth of the household is greater than the permitted allowances, then the household loses 
its entitlement to this benefit. The relevant income of the household minus the income allowances 
cannot exceed the overall benefit amount described below in order for the household to receive 
the benefit. If the relevant income minus the allowances is smaller than the overall benefit amount, 
then the benefit amounts to the difference between the two.  

  Benefit Amount 

Benefit amounts are exactly the same as under Citizen’s benefit (see Section 2.5.7.). 

The maximum benefit amount is made up of the basic benefit rates (which vary with age), actual 
housing  and  heating  costs  and,  if  applicable,  health  and  long-term  care  social  security 
contributions. 

Table 2.4 Basic benefit rates (in Euro per month) 

Single adult 

Adult in a couple (per person) 

2021 

2022 

2023 

2024 

446 

401 

449 

404 

502 

451 

563 

506 

In addition to the basic benefits, costs for actual housing and heating (as long as reasonable) are 
also covered. 

This  benefit  also  foresees  benefits  to  cover  additional  needs  of  the  household  (Mehrbedarfe), 
which are granted in specific situations such as pregnancy, lone parenthood as well as disabilities 
and  sicknesses.  In  EUROMOD,  only  benefits  to  cover  additional  needs  because  of  lone 
parenthood are included (as there is no information on pregnancies and on medical and nutrition 
expenses incurred by people with disabilities or sicknesses which are not covered by the regular 
health and long-term care insurance). Additional benefits for lone parents amount from 12% to 
60% of the single adult basic rate, depending on the number and ages of the dependent children 
living in the household. These rates have been constant over the years. 

  EUROMOD modelling 

As mentioned above, this benefit is meant to cover heating costs too. Given that we do not observe 
heating costs in the EUROMOD input database, we apply average heating costs by household 
size from the German Socio-Economic Panel.  

Actual housing costs are covered by the benefit as long as they are reasonable. Given that housing 
costs vary a lot depending on the location of the flat, without further geographical information on 
where the household is located is not possible to apply a meaningful maximum. Therefore, in 
EUROMOD the totality of housing costs is covered for every recipient of this benefit. 

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2.5.12  General Social Assistance (bsa00_de) 

Individuals who are not able to work at least three hours per day – either because they are aged 
65 or older, or because they are aged 18-65 and physically not able to work, and who are not 
covered by social assistance for old-age and reduced work ability, are entitled to general social 
assistance. This shall secure a minimum income for everybody. Income test and benefit amounts 
are  exactly  the  same  as  under  social  assistance  for  old-age  and  for  reduced  ability,  only  the 
eligibility conditions differ. 

  Definitions 

These benefits are means tested with respect to income and wealth and they are determined by 
the needs of the entire household. Thus, unit of analysis is the household. 

  Eligibility Conditions 

Recipients of general social assistance need to be unable to work at least three hours per day. 
Recipients need to be aged between 18 and 65, and they cannot receive income from any of the 
following  benefits:  education  benefits  (bed_s=0),  citizen’s  benefit  (bunnc_s=0),  and  social 
assistance for old-age and reduced work ability (bsaoa_s=0). 

 

Income Test 

There is a means test on income and wealth for eligibility to old-age social assistance and social 
assistance for reduced work ability. There are allowances for income and wealth, which depend 
on household composition and the age of household members and are detailed below. 

Relevant  income:  Disposable  income  (including  market  income  from  employment,  pension 
income, most benefits and accounting for social security contributions and income tax), excluding 
citizen’s benefit, additional child benefit, housing benefits and disability benefits for war victims.  

Income  allowances:  30%  on  earned  income,  up  to  50%  of  the  basic  benefit  rate  (see  benefit 
amount below). 

Wealth allowances: From 2017 onwards, the wealth allowance has been raised to 5000 Euro per 
adult in the household and 500 Euro per child (irrespective of their ages). 

If the wealth of the household is greater than the permitted allowances, then the household loses 
its entitlement to this benefit. The relevant income of the household minus the income allowances 
cannot exceed the overall benefit amount described below in order for the household to receive 
the  benefit.  If  the  relevant  incomes  minus  the  allowances  are  smaller  than  the  overall  benefit 
amount, then the benefit amounts to the difference between the two.  

  Benefit Amount 

Benefit amounts are exactly the same as under Citizen’s benefit (see Section 2.5.7.). 

The maximum benefit amount is made up of the basic benefit rates (which vary with age), actual 
housing  and  heating  costs  and,  if  applicable,  health  and  long-term  care  social  security 
contributions. 

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Table 2.5 Basic benefit rates (in Euro per month) 

Single adult 

Adult in a couple (per person) 

Dependent child aged 0 to 5 

Dependent child aged 6 to 13 

Dependent child aged 14 to 17 

Dependent child aged 18 to 25 

2021 

2022 

2023 

2024 

446 

401 

283 

309 

373 

357 

449 

404 

285 

311 

376 

360 

502 

451 

318 

348 

420 

402 

563 

506 

357 

390 

471 

451 

In addition to the basic benefits, costs for actual housing and heating (as long as reasonable) are 
also covered. 

This  benefit  also  foresees  benefits  to  cover  additional  needs  of  the  household  (Mehrbedarfe), 
which are granted in specific situations such as pregnancy, lone parenthood as well as disabilities 
and  sicknesses.  In  EUROMOD,  only  benefits  to  cover  additional  needs  because  of  lone 
parenthood are included (as there is no information on pregnancies and on medical and nutrition 
expenses incurred by people with disabilities or sicknesses which are not covered by the regular 
health and long-term care insurance). Additional benefits for lone parents amount from 12% to 
60% of the single adult basic rate, depending on the number and ages of the dependent children 
living in the household. These rates have been constant over the years. 

  EUROMOD modelling 

As mentioned above, this benefit is meant to cover heating costs too. Given that we do not observe 
heating costs in the EUROMOD input database, we apply average heating costs by household 
size from the German Socio-Economic Panel.  

Actual housing costs are covered by the benefit as long as they are reasonable. Given that housing 
costs vary a lot depending on the location of the flat, without further geographical information on 
where the household is located is not possible to apply a meaningful maximum. Therefore, in 
EUROMOD the totality of housing costs is covered for every recipient of this benefit. 

2.5.13  Additional Child Benefits (bchot_de) 

Additional child benefits are social benefits that are supposed to help families, in which parents 
receive income and child benefits covering their own needs according to “citizen’s benefit”, but 
not the needs of the dependent children entirely (Kinderzuschlag). 

  Definitions 

The unit of analysis is the family, as defined under the simulation of child benefits. 

  Eligibility Conditions 

To be eligible, dependent children need to be eligible to child benefits (bch00_s>0), be aged 25 
or younger, and in addition be unmarried and live in the same household with their parents. Note 
how this condition varies from the eligibility condition at child benefits, where dependent children 
may live in an own household. 

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 

Income Test 

The level of the additional child benefits depends on the children’s needs and the household’s 
income  and  wealth.  It  is  reduced  if  household  income  exceeds  the  parents’  needs,  or  if  the 
household holds wealth exceeding an allowance. 

There is an income test on eligibility. Disposable household income needs to fall between two 
thresholds,  such  that  households  fulfil  minimum  income  requirements,  but  do  not  exceed  a 
maximum  level.  Generally,  income  must  cover  the  parents’  needs,  but  not  the  needs  of  the 
children,  so  that  households  receiving  only  general  social  assistance,  or  citizen’s  benefit  are 
usually not eligible for the additional child benefits. For each euro of income above the previous 
maximum amount, the additional child benefits are lowered by 0.45 Euro 

For the period 2021-2024, the lower income threshold of the income test is a lump-sum amount 
of  600  Euro  per  lone  parent  and  900  Euro  per  couple.  As  mentioned  before,  with  additional 
income above the upper threshold the additional child benefits will be reduced gradually.  The 
respective upper limit is the amount equivalent to the basic benefits of the parents under Citizen’s 
benefit plus the number of children multiplied by the maximum benefit amount (205 Euro per 
month for 2021, 209 Euro for 2022, 250 Euro for 2023, 292 Euro for 2024). Each of the lower 
and upper limits is topped up by an additional allowance for housing expenses. These are based 
on the actual rent paid (xhcrt) multiplied by a factor lower than one, which varies by number of 
children and whether it is a lone/couple parent household.  

Table 2.6 reports these coefficients.  

Table 2.6 Proportion of housing expenses which are deemed to cover parents’ needs in 2021-2024 
(BMFSFJ 2024) 

Number of 
children 
1 

2 

3 

4 

5 or more 

Lone 
parent 
0.77 

0.63 

0.53 

0.46 

0.40 

Couple 
parents 
0.83 

0.71 

0.62 

0.55 

0.50 

The income of the household that needs to fall within in the lower and upper limits is disposable 
household income, after social contributions and including simulated benefits, but before income 
taxes.  It  explicitly  excludes  child  benefits,  housing  benefits,  maternity-leave  benefits,  and 
parental-leave benefits. 

  Benefit Amount 

Maximum benefits amounted to 205 Euro per month in 2021 and 209 Euro per months for the 
first half 2022, which was topped up by 20 Euro from 01.07.2022. In 2023 the maximum benefit 
amounted to 250 Euro and in 2024 is 292 Euro per month per child. It is paid if households pass 
the income test. It is reduced by the family’s income as far as it exceeds the lower threshold for 
benefit eligibility, by a fraction of 45% since 2020. It is further reduced by children’s own income, 
market  or  replacement  income,  and  if  households  hold  wealth  exceeding  certain  allowances, 
which are the same as for general social assistance. Starting from 2020 the additional child benefit 
is not dropped entirely when the income reaches an upper threshold, instead it is further reduced 
by a fraction of 45% of the family’s income until it equals zero.  

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  EUROMOD modelling 

When  benefit  amounts  are  simulated,  receipt  is  conditioned  on  receipt  of  child  benefits 
(bch00_s>0), and on the relevant household income falling within the relevant income range. In 
case this income test is passed, the basic benefit rate is assigned for each dependent child in the 
household.  Relevant  assets,  after  accounting  for  allowances,  and  averaged  per  month,  are 
subtracted from benefit amounts.  

In addition, the simulation of this policy includes an adjustment mechanism that checks whether 
households are better off receiving any combination of bunnc_s, bsaoa_s or bsa00_s or receiving 
any  combination  of  bho00_s  and  bchot_s.  Households  within  a  determined  income  range  – 
usually households with children – may qualify for both kinds of state assistance but necessarily 
need to choose one. The program here assumes that households do choose the option that yields 
the  highest  financial  gain  and  sets  the  benefit  amount  of  the  other  option  to  zero.  In  reality, 
households that do qualify for both systems are free to choose the system they like the most (for 
instance, in terms of reporting requirements) and might not choose the best financial option. 

BTA and BCA extensions are off, so the baseline model neither adjusts for non-take-up of the 
benefit nor calibrates its receipt, but the user can activate them if necessary. See section 2.4 for 
technical details on both extensions and their interactions.  

Users can enable the necessary extensions in Country Tools/Set Switches. For proper functioning, 
the extensions require the following inputs:  

  BTA:  The  estimated  take-up  rate  of  the  benefit  should  be  set  as  the  value  of  the 
$bchot_BTA_rate10 constant in the model. Currently, the value is set to 1, indicating no 
adjustment for non-take-up.  

  BCA: The aggregate expenditure needs to be filled out in the External Statistics table, so 
that  the  calibration  rate  $bchot_targetBCA_amt)  is  computed  accordingly.  Data  are 
currently available for the years 2018-2023; given the absence of information for 2024, 
the calibration rate is not computed within the 2024 system, but the one computed within 
the 2023 system is used instead. For the modelling of reforms, the 2024 system should 
be used in order to allow for variation in the number of beneficiaries (hence expenditure): 
beneficiaries will change when the eligibility conditions change by applying the share of 
2023 to the new pool of eligible units. If previous systems were used for reforms, total 
expenditure would remain constant irrespective of the reform applied, since the model 
would always stick to the existing external statistics.  

2.5.14  Educational Allowance for School Material (bched_de) 

  Definitions 

The educational allowance for school material is part of a broader category of benefits (the so-
called Bildungs- und Teilhabepaket) which aim at improving the educational and cultural chances 
of children living in households who receive means-tested benefits. Most of these benefits are in-
kind benefits, which are not simulated in EUROMOD.  

10 Estimation of non-take-up from external source: 
https://econpapers.repec.org/article/palcompes/v_3a60_3ay_3a2018_3ai_3a4_3ad_3a10.1057_5fs4129
4-017-0041-5.htm  

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  Eligibility Conditions 

All children in school age living in households who receive any of the following  means-tested 
benefits: bunnc, bsaot, bsa00, bsaoa, bho00, bchot. 

 

Income Test 

None, but eligibility depends on the household receiving means-tested benefits. 

  Benefit Amount 

From  2021  on,  the  benefit  amount  is  increased  by  the  same  rates  the  basic  benefit  rates  of 
unemployment benefit II increase, such that in 2022 the benefits amount to 156 Euro. With the 
introduction of citizen’s benefit in 2023, the benefit increased again to 174 Euro and in 2024 it 
increased accordingly to 195 Euro per year. 

  EUROMOD modelling 

As  only  children  living  in  households  receiving  the  aforementioned  benefits  are  eligible,  the 
simulation of the allowance for school material is dependent on the simulation of these benefits 
and thus no separate or additional eligibility condition is implemented in EUROMOD.  

2.5.15  Wage Compensation Scheme (bwkmcee_de) 

  Definitions 

The wage compensation scheme (Kurzarbeitergeld) compensates wage losses from unvoluntary 
reduced work hours. It is a contributory benefit from the social security unemployment insurance. 
This benefit is paid for a maximum of 12 months. 

  Eligibility Conditions 

All dependent employees with earnings above the minijob threshold whose employers apply for 
reduced work hours. 

 

Income Test 

None. 

  Benefit Amount 

In principle, the benefit amount is 60% of the difference in net earnings (gross earnings minus 
taxes and social security contributions). For individuals with children, the benefit amount is 67%. 

Due to the corona crisis in 2020, the replacement rate has been increased for individuals who 
receive wage compensation for more than 4 months, provided that the hours reduction is at least 
50% of their original work hours. Thus, the replacement rate amounts to 70% in the fifth and sixth 
months (77% for parents) and to 80% from the seventh month onwards (87% for parents). This 
regulation remained in force during 2021 and up to 30th of June, 2022.  

  EUROMOD modelling 

Given that the benefit replaces the difference in net earnings, policy “bwkmcee_de” computes net 
earnings  under  the  observed  earnings  and  under  the  simulated  reduced  hours.  To  this  end, 
Euromod uses a simplified tax tariff and SSC computations (which is how state agencies compute 
the benefit amount).  

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This policy can only produce results if the model is run in combination with the LMA add-on. 
The individuals that are selected to undergo transitions to monetary compensation schemes are 
defined in the TransLMA_de policy, which is switched on automatically by the add-on. For more 
information  about  the  modelling  of  labour  market  transitions  please  consult  the  ‘Simulating 
labour market transitions in EUROMOD’ document. 

2.6  Extraordinary measures 

2.6.1  Covid-related one-off child bonus (bencovidch_de) 

  Definitions 

The child  bonus  is  a  one-off  benefit  paid to  families with  children  as  family-oriented support 
during the COVID19 pandemic. In 2022 the bonus was continued (Kinderbonus 2022). No one-
off payment is in place in 2023. 

  Eligibility Conditions 

All children eligible for child benefits (bch00_s) are eligible for this benefit. 

 

Income Test 

None. However, in contrast to the usual child benefits (bch00_s), the child bonus is not deducted 
from any means-tested benefits. 

  Benefit Amount 

This benefit amounts to one-off 300 Euro per child in 2020, 150 Euro in 2021 and 100 Euro per 
child in 2022. 

  EUROMOD modelling 

This benefit is saved in variable bchls_s. 

2.6.2  Covid-related one-off benefit for the self-employed (bencovidse_de) 

  Definitions 

Due to the lock-down at the beginning of the Covid pandemic in 2020, the government provided 
a one-off payment aimed to help self-employed to pay for current expenses during the lock-down 
and, therefore, compensating parts of operating losses. This payment does not need to be paid 
back to the government.  

  Eligibility Conditions 

Self-employed individuals with firms up to 10 employees can apply for this payment. 

 

Income Test 

None.  However,  self-employed  individuals  need  to  assure/submit  proof  of  being  in  severe 
financial distress as a consequence of the lockdown. 

  Benefit Amount 

Individuals  can  apply  for  a  maximum  of  9,000  Euro  in  firms  up  to  5  employees  and  for  a 
maximum of 15,000 Euro in firms up to 10 employees. 

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  EUROMOD modelling 

Given  that  we  do  not  have  information  on  the  individual  amount  of  operating  losses,  i.e.  the 
decrease  in  self-employment  income,  the  benefit  is  turn  off  by  default.  In  case  this  benefit  is 
turned  on,  a  random  variable  determines  whether  a  self-employed  individual  applies  for  this 
funding.  This  benefit  is  then  saved  in  variable  bwkmcse_s.  For  individuals  applying  for  this 
benefit, their income is reduced downwards in policy “yseadj_de”. In case, the policy is switched 
on, it is only useful in combination with data before the COVID crisis. 

2.6.3  Heating bonus (bhtxp_de) 

  Definitions 

In spring 2022, the German government introduced a one-off payment for households with lower 
income  to  compensate  for  increasing  energy  costs  (Heizkostenzuschuss).  The  benefit  was  not 
considered for income test for other social benefits. In September 2022, a second heating bonus 
was introduced, that was paid during 2023.  

  Eligibility Conditions 

For  the  first  heating  bonus,  every  person  that  received  housing  benefits  or  education  benefits 
between October 2021 and March 2022 for at least one month is eligible for the benefit. For the 
second heating bonus, every person that received housing benefits or education benefits between 
September 2022 and December 2022 for at least one month is eligible for the benefit. 

 

Income Test 

There is  no  separate or  additional income  test  for the  heating  bonus.  For the  income  tests  for 
housing benefits and education benefits, see the respective paragraphs. 

  Benefit Amount 

The  benefit  is  different  between  recipients  of  housing  benefits  and  recipients  of  education 
benefits. For a single household that receives housing benefits the first heating bonus amounts to 
270 Euro, for a household with two household members 350 Euro are paid and for each additional 
household member the benefit amounts to 70 Euro. In case of the second heating bonus, single 
households receive 415 Euro, two-person households receive 510 Euro and for each additional 
household member 100 Euro are added.  

Recipients of education benefits are paid 230 Euro and 345 Euro. 

  EUROMOD modelling 

Eligibility is assessed by using the information from the input data on actual receipt of housing 
benefits (bho00_de) and education benefits (bed_de). We assume that if individuals indicated the 
receipt of housing and education benefits during the time of the interviews, they also received 
them during the evaluation period. In case of the second heating bonus, that was paid during 2023, 
eligibility is based on benefit receipt during a period of 2022. As the two evaluation periods for 
the first and second payment do not lie substantially far apart from each other, we assume that 
receipt did not change between these two periods.     

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2.6.4  Lump-sum energy transfer (blsxp_de)  

  Definitions 

In  spring  2022,  the  German  government  introduced  a  lump-sum  one-off  payment  due  to 
increasing energy prices. Every employee and self-employed whose labor income is subject to 
income taxation received the benefit by September 1st, 2022. Employees were paid directly by 
their employer, while self-employed paid less advance tax on their expected income. In addition 
to that, also pensioners received a lump-sum one-off payment in December 2022.  

  Eligibility Conditions 

Every individual who receives labor income that is subject to income taxation and individuals 
working  in  a  minijob,  as long  as  their employee  pays  the  lump-sum  income  tax  for  minijobs, 
receive the benefit.  

 

Income Test 

No income test is conducted. 

  Benefit Amount 

The gross benefit amounts to 300 Euro per recipient. As the benefit is subject to income taxation 
the net benefit will be lower in most of the cases except for individuals working in a minijob. The 
range of the net benefit is therefore 300 Euro (minijob) to 165 Euro (highest income tax tariff 
bracket). 

  EUROMOD modelling 

In practice, all individuals with labour income subject to income taxation that were employed on 
September 1st, 2022 received the benefit. In EUROMOD, all employees that have earnings above 
the minijob threshold (450 Euro for 2022) and are not listed as currently unemployed are assumed 
to receive the benefit. In case of self-employment, we do not have any information of advance tax 
payments of the individuals. We thus assume that self-employed receive the lump-sum energy 
transfer as the regular employed. As only individuals that have income subject to income taxation 
were eligible for the benefit, self-employment income must exceed the basic tax-free allowance. 
This is considered in the simulation.  

Note that in this policy only the gross benefit of 300 Euro is simulated. To account for income 
taxation, the lump-sum energy transfer is added to taxable income. 

2.6.5  One-off payments for unemployed and recipients of social assistance (bsaxp_de)  

  Definitions 

In spring 2022, the German government introduced one-off payments for various recipients of 
social  benefits,  mainly  unemployment  benefits  and  social  assistance,  to  support  low-income 
households in dealing with increasing energy prices. One-off payment was in place only in 2022. 

  Eligibility Conditions 

Every individual who is eligible for unemployment benefits I and II, general social assistance and 
social assistance for old-age and reduced work ability is automatically eligible for the one-off 
payments.  

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 

Income Test 

There is no separate or additional income test for the one-off payments. For the income tests for 
citizen’s  benefit,  general  social  assistance  and  social  assistance  for  old-age  and  reduced  work 
ability, see the respective paragraphs. 

  Benefit Amount 

Recipients  of  citizen’s  benefit,  general  social  assistance  and  social  assistance  for  old-age  and 
reduced work ability receive a one-off payment of 200 Euro, while recipients of unemployment 
benefits I receive 100 Euro. 

  EUROMOD modelling 

Eligibility conditions from the relevant policies (bunnc_s, bsaot_s, bsaoa_s, bsa00_s, bunct_s) 
are used to assess eligibility for the benefit. 

2.6.6  Lump-sum energy transfer for students (blsxpsd_de) 

  Definitions 

In  March  2023,  university  students  and  students  in  other  tertiary  education  could  receive  an 
energy-related one-off payment after filing an application. In contrast to the benefit for working 
individuals and pensioners, the payment for students was tax exempt.  The payment was in place 
only in 2023. 

  Eligibility Conditions 

To receive the benefit, students need to be enrolled at a university or other tertiary educational 
institution by December 1st, 2022. It is also possible to receive the lump-sum energy transfer for 
students and blsxp_s at the same time, if students fulfill the respective criteria (see 2.6.4). 

 

Income Test 

No income test is conducted. 

  Benefit amount 

The benefit amounts to 200 Euro per student. The payment is tax and social security contribution 
exempt.  

  EUROMOD Modelling 

Eligibility is assessed according to the current status of education as observed in the data assuming 
implicitly that the status of education coincides to the one on December 1st, 2022. Although it 
might be the special case that some students in tertiary education are not eligible for the benefit, 
e.g. some vocational schools, we assume that all students currently enrolled in tertiary education 
are eligible for the benefit. Furthermore, we assume full-take up for the benefit. 

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2.7  Social insurance contributions 

Generally, social contributions to all insurance systems have been simulated for most of the social 
groups. The relevant contribution rates for the single insurance systems are tabulated in Tables 
2.7 to 2.13. 

In Table 2.7, the entire contribution rates are displayed. These are, however, often shared between 
employers and employees. Therefore, subsequent tables show contribution rates to the respective 
system, differentiated by the single social groups. 

Table 2.7 Social Security: contribution rates[1] and assessment ceilings 

Statutory pension insurance 
(gesetzliche Rentenversicherung) 
   Contribution rate 

   Assessment ceiling (western 
Germany), Euro per month 
   Assessment ceiling (eastern Germany), 
Euro per month 
   Average Assessment ceiling [2] 
Statutory health insurance (gesetzliche 
Krankenversicherung) 
   Contribution rate[3] 
   Assessment ceiling, Euro per month 

   Threshold for compulsory insurance, 
Euro per month 
(Versicherungspflichtgrenze) 
Statutory long-term care insurance 
(soziale Pflegeversicherung) [4] 
   Employees w/o children (additionally) 

  2021 

2022 

2023 

2024 

18.6 

18.6 

18.6 

18.6 

7,100 

7,050 

7,300  7,550 

6,700 

6,750 

7,100  7,450 

7,022 

6,992 

7,261  7,531 

15.9 

15.9 

16.2 

16.3 

  4,837.5  4,837.5  4,987.5  5,175 

  5,362.5  5,362.5 

5,550  5,775 

3.05 

3.05 

3.05 

3.40 

0.25 

0.35 

0.35 

0.60 

0.25 

0.00 

0.00 

0.00 

0.50 

0.50 

0.50 

0.50 

   Saxony (additionally for employees, in 
exchange for one more holiday) 
   Reduction per child from two to five 
or more children below 25 years 
Statutory unemployment insurance 
(ges. Arbeitslosenversicherung) 
Statutory accident insurance 
(gesetzliche Unfallversicherung) 
Notes: [1] Contribution rates refer to the entire rate paid, i.e. the rate paid for by the employer, plus the rate 
paid for by the employee. [2] Weighted average with the census population shares. The assessment ceiling 
applies also to the unemployment insurance. [3] From 2015, average additional rates have been assumed 
(these amount 1.3% in 2021 and 2022, 1.6% in 2023 and 1.7% in 2024). [4] Basic contribution rate 
increased to 3.4% and additional rate to 0.6% already by July 1st, 2023. The assessment ceiling and 
threshold for compulsory insurance of the long-term care insurance corresponds to the one of statutory 
health insurance 

0.96 

2.40 

2.40 

2.60 

2.60 

1.12 

1.12 

1.12 

Table 2.8 shows contribution rates to the statutory pension insurance over the years 2021 to 2024, 
differentiated  by  contribution  rates  for  employers  (for  regular  employment  and  for  minijobs), 
employees, the self-employed, and pensioners. 

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Table 2.8 Social contributions: Statutory Pension Insurance (rates in %) 

Employer Contribution Rate 

   Regular Employment (and Midijobs) 

9.30 

9.30 

9.30 

9.30 

2021 

2022 

2023 

2024 

...Minijobs 

Employee Contribution Rate 

Self-employed (in certain services) Contribution 
Rate[1] 
Pensioner Contribution Rate 

15.00 

15.00 

15.00 

15.00 

9.30 

9.30 

9.30 

9.30 

18.60 

18.60 

18.60 

18.60 

0.00 

0.00 

0.00 

0.00 

Notes: [1] This is the contribution rate to statutory pension insurance that has been assumed in the 
simulation for the self-employed in health and education services. 

Table 2.9 shows contribution rates to the statutory health insurance over the years 2021 to 2024, 
differentiated  by  contribution  rates  for  employers  (for  regular  employment  and  for  minijobs), 
employees,  the  self-employed,  and  pensioners.  Starting  from  2015  onwards,  public  health 
insurance  companies  (gesetzliche  Krankenkassen)  can  set  company-specific  additional 
contributions. Since 2019 these additional contributions are paid equally by the employer and the 
employee. EUROMOD assumes for each year the average additional contribution as published 
by the German government. These amount to 1.3% in 2021 and 2022,1.6% in 2023 and 1.7 % in 
2024. 

Table 2.9 Social contributions: Statutory Health Insurance (rates in %) 

Employer Contribution Rate 

   Regular Employment (and Midijobs) 

...Minijobs 

Employee Contribution Rate 
Self-employed Contribution Rate[1] 
Pensioner Contribution Rate 

2021 

2022 

2023 

2024 

7.95 

7.95 

8.10 

8.15 

13.00 

13.00 

13.00 

13.00 

7.95 

7.95 

8.10 

8.15 

15.90 

15.90 

16.20 

16.30 

7.95 

7.95 

8.10 

8.15 

Notes: [1] This is the contribution rate to statutory health insurance that has been assumed in the 
simulation for the self-employed who have income from self-employment below the threshold for 
statutory health insurance. 

Table 2.10 shows contribution rates to the statutory long-term care insurance over the years 2021 
to  2024,  differentiated  by  contribution  rates  for  employers  (for  regular  employment  and  for 
minijobs), employees, the self-employed, and pensioners. Since 2024 a novel scheme is applied. 
The more children below the age of 25 an individual has, the lower the contribution rate for long-
term care insurance. Individuals with any number of children above 25 pay the standard rate. 

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Table 2.10 Social contributions: Statutory Long-term Care Insurance (rates in %) 

Employer Contribution Rate 

   Regular Employment (and Midijobs) 

   Minijobs 

Employee Contribution Rate 

   Regular Rate 
   Additional Contribution Rate for childless 

   Reduction of Contribution Rate per child from two 
to five or more children below 25 years 
Self-employed Contribution Rate[1] 
Pensioner Contribution Rate 

2021 

2022 

2023 

2024 

1.525 

0.000 

1.525 

1.525 

1.700 

0.000 

0.000 

0.000 

1.525 

0.250 

0.000 

1.525 

1.525 

1.700 

0.250 

0.250 

0.600 

0.000 

0.000 

0.250 

- 

- 

- 

   Regular Rate 

   Additional Contribution Rate for childless 

3.050 

0.250 

3.050 

3.050 

3.400 

0.250 

0.250 

0.600 

Notes: [1] Long-term care insurance has not been simulated for the self-employed. 

Table 2.11 shows contribution rates to the statutory unemployment insurance over the years 2021 
to  2024,  differentiated  by  contribution  rates  for  employers  (for  regular  employment  and  for 
minijobs), employees, the self-employed, and pensioners. 

Table 2.11 Social contributions: Statutory Unemployment Insurance (rates in %) 

Employer Contribution Rate 

   Regular Employment (and Midijobs) 

...Minijobs 

Employee Contribution Rate 
Self-employed Contribution Rate[1] 
Pensioner Contribution Rate 

2021 

2022 

2023 

2024 

1.20 

0.00 

1.20 

- 

1.20 

0.00 

1.20 

- 

1.30 

0.00 

1.30 

- 

1.30 

0.00 

1.30 

- 

0.00 

0.00 

0.00 

0.00 

Notes: [1] Statutory unemployment insurance has not been simulated for the self-employed. 

Table 2.12 shows contribution rates to the statutory accident insurance over the years  2021 to 
2024,  differentiated  by  contribution  rates  for  employers  (for  regular  employment  and  for 
minijobs),  employees,  the  self-employed,  and  pensioners.  Statutory  accident  insurance  is  paid 
completely  by  the  employer.  The  contribution  rate  is  based  on  occupation-specific  risk.  The 
numbers  displayed  here  are  ex-post  average  contribution  rate.  The  most  recent  average 
contribution rate is assumed to be constant for the following years. 

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Table 2.12 Social contributions: Statutory Accident Insurance (rates in %) 

Employer Contribution Rate 

   Regular Employment (and Midijobs) 

...Minijobs 

Employee Contribution Rate 
Self-employed Contribution Rate[1] 
Pensioner Contribution Rate 

2021 

2022 

2023 

2024 

0.96 

0.00 

0.00 

- 

1.12 

0.00 

0.00 

- 

1.12 

0.00 

0.00 

- 

1.12 

0.00 

0.00 

- 

0.00 

0.00 

0.00 

0.00 

Notes: [1] Statutory accident insurance has not been simulated for the self-employed. 

Employees and employers are obliged to pay statutory social insurance contributions from gross 
wages and salaries, unless gross income exceeds certain thresholds, which allows employees to 
contract out of statutory health and long-term care insurance. Employees who earn salaries above 
this threshold may choose private health insurance instead. Private health insurance premiums do 
not  depend  on  gross  income,  but  mostly  on  age,  gender,  and  prior  health  conditions.  Social 
insurance contributions are paid as fixed shares of gross income up to a contribution assessment 
ceiling.  Gross  income  above  this  ceiling  is  disregarded.  Employees  who  earn  more  than  the 
assessment  ceiling  for  statutory  pension  and  unemployment  insurance  pay  no  additional 
contributions. The same applies for statutory health and long-term care insurance, the threshold 
is however defined differently  

Contributions have been simulated for statutory pension insurance, compulsory statutory health 
insurance, statutory long-term care insurance, statutory unemployment insurance, and statutory 
accident  insurance.  Contributions  were  differentiated  for  four  groups:  employers,  employees, 
self-employed and pensioners. Contributions to private health insurance could not be simulated 
precisely, as they do not depend on income, but rather on individual characteristics, like health 
status,  age,  and  individual-specific  illness  risks.  In  the  simulations,  average  contributions 
(observed in the SOEP micro data) to private health insurance, differentiated by self-employed, 
and pensioners, have been imputed.11 Concerning private health insurance for regular employees, 
we assume that all employees eligible for private health insurance (income above the compulsory 
threshold) stay in statutory health insurance. 

Civil  servants  are  not  covered  by  compulsory  social  insurance  and  are  not  obliged  to  pay 
contributions. The federal or state government provides financial assistance (approximately 50% 
to  80%  of  the  expenses)  in  cases  of  illness,  birth,  long-term  care  and  death  and  a  retirement 
pension. Usually, civil servants have a private health insurance to insure against health costs not 
covered by the government’s financial assistance. However, social insurance contributions for 
civil servants have not been simulated. 

2.7.1  Employer Social Contributions (tscer_de) 

Generally, in case of employees, all social contributions are split equally between employees and 
employers. Exceptions have been statutory health insurance, where the employer’s contribution 
was lower until 2018, and long-term care insurance, where employees, who do not have children, 
have a 0.6 percentage points higher contribution rate and employees with more children a up to 1 

11 The within-group distribution of contributions to private health insurance is relatively homogeneous 
over age-groups so that a further differentiation of contributions by age groups does not appear to 
deliver much more relevant variation. 

55 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
EUROMOD Country Report – GERMANY 

percentage point lower contribution rate. Statutory accident insurance is paid by employers only. 
Employers' contribution rates to the respective insurances are tabulated in Table 2.13. 

Table 2.13 Employers’ Social Security Contribution rates (in %) 

1. Pension social insurance (tscerpi_s) 

2021 

2022 

2023 

2024 

9.300 

9.300 

9.300 

9.300 

2. Compulsory statutory health insurance (tscerhl_s) 

7.950 

7.950 

8.100 

8.150 

3. Statutory long-term care insurance (tscerci_s) 

1.525 

1.525 

1.525 

1.700 

4. Statutory unemployment insurance (tscerui_s) 

1.200 

1.200 

1.300 

1.300 

5. Statutory accident insurance (tscerac_s) 

6. Compulsory statutory health insurance (Minijob) 
(tscerhl_s) 
7. Statutory pension insurance (Minijob) (tscerpi_s) 

Total (tscer_s) 

Total (Minijob) (tscer_s) 

0.960 

1.120 

1.120 

1.120 

13.000  13.000  13.000  13.000 

15.000  15.000  15.000  15.000 

20.935  21.095  21.345  21.570 

28.000  28.000  28.000  28.000 

For mini jobs, employers have to pay contributions to statutory health and pension insurance. For 
2021 the contribution rate amounted to 31.51%, in 2022 to 31.28% and to 31.4 % in 2023 and 
2024. It consists of health insurance (13%), pension insurance (15%), a lump sum for payroll tax, 
solidarity surcharge, and church tax (2%), and certain levies (1.2% in 2018, and 1.15% in 2019 
and 2020, 1.5% in 2021, 1.28% in 2022, 1.4% in 2023 and 2024) (see Minijob-Zentrale 2022). 
No contributions to the long-term care insurance and the unemployment insurance have to be paid 
in mini jobs. For midi jobs, employers pay their standard contribution rates, comprised of statutory 
health, long-term care, pension, and unemployment insurance. 

Contributions  were  simulated  on  the  basis  of  yem,  i.e.  observed  income  from  employment, 
adjusted  for  the  actual  number  of  months  of  employment  during  the  year  (yemmy).  Unit  of 
analysis is the individual. Eligibility for all insurances conditions on not being a civil servant and 
having  income  below the respective thresholds for  compulsory  statutory  insurance.  In  case  of 
private health insurance, i.e. when income exceeds the threshold for statutory health insurance, 
employers’ contributions are zero because employees pay the entire rate themselves. 

2.7.2  Employee Social Contributions (tscee_de) 

Employees'  contribution  rates  to  the  respective  insurances  are  tabulated  in  Table  2.14.  As 
explained above, employees do not need to contribute to the statutory accident insurance, because 
employers pay the entire rate. This is similar with social contributions in mini jobs. 

For midi jobs, employee’s social insurance contributions are levied on fictitious earnings and are 
faded  in  until  they  reach  the  full  rates  at  a  gross  wage  of  2000  Euro.  Fading-in  of  social 
contributions is determined by population-average social contribution rates (0.7509 in 2021 and 
2022, 0.6922 in 2023 and 0.6846 in 2024). The fictitious earnings are based on the following 
formula (since Jan 2013):  

𝐹𝐸 = 𝑅 ∗ 𝑀𝑖𝑛𝑖 + ((

𝑀𝑖𝑑𝑖
𝑀𝑖𝑑𝑖−𝑀𝑖𝑛𝑖

) − (

𝑀𝑖𝑛𝑖
𝑀𝑖𝑑𝑖−𝑀𝑖𝑛𝑖

) ∗ 𝑅) ∗ (𝐸 − 𝑀𝑖𝑛𝑖), 

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where 𝐹𝐸 stands for fictitious earnings, 𝑅 is the population-average social contribution rate, 𝑀𝑖𝑑𝑖 
is the midi job threshold (2000 Euro per months), 𝑀𝑖𝑛𝑖 is the mini job threshold (520 Euro) and 
𝐸 are actual earnings. 

Simulation proceeds in a similar manner to employers’ contributions. Again, contributions were 
simulated on the basis of yem, i.e. observed income from employment, adjusted for the actual 
number of months of employment during the year (yemmy). Unit of analysis is the individual. 
Eligibility for all insurances conditions on not being a civil servant and having income below the 
respective thresholds for compulsory statutory insurance (also see Section 1.3 for more details on 
these thresholds). In case of private health insurance, an average contribution is imputed for all 
employees,  for  whom  income  exceeds  the  threshold.  The  imputed  mean  contribution  is  the 
average contribution to private health insurance, paid for by employees in the SOEP data. 

Table 2.14 Employees’ Social Security Contribution rates (in %) 

1. Compulsory statutory pension insurance 
(tsceepi_s) 
2. Compulsory statutory health insurance (tsceehl_s) 

2021 

2022 

2023 

2024 

9.3000 

9.3000 

9.3000 

9.3000 

7.9500 

7.9500 

8.1000 

8.1500 

3. Statutory long-term care insurance (tsceeci_s) 

1.5250 

1.5250 

1.5250 

1.7000 

4. Add. LTC contribution: childless (tsceeci_s) 

0.2500 

0.3500 

0.3500 

0.6000 

5. Statutory unemployment insurance (tsceeui_s) 

1.2000 

1.2000 

1.3000 

1.3000 

6. Statutory accident insurance (tsceeac_s) 

0.0000 

0.0000 

0.0000 

0.0000 

7. Contributions factor for fading-in at Midi Jobs 
(tsceehl_s) 
Total (tscee_s) 

0.7509 

0.7509 

0.6922 

0.6846 

20.225 

20.225 

20.475 

21.735 

2.7.3  Self-Employed Social Contributions (tscse_de) 

The self-employed are not covered by most of the statutory social insurances. Contributions to 
long-term  care  insurance,  to  unemployment  insurance,  and  to  accident  insurance  are  entirely 
voluntary  for  the  self-employed,  and  it  cannot  be  assumed  that  self-employed  opt  for  such 
insurances. Also, statutory health insurance is generally not compulsory for the self-employed in 
Germany,  and  most  of  the  self-employed  choose  private  health  insurance.  However,  every 
individual  in  Germany  is  obliged  to  contribute  to  any  health  insurance,  so  that  also  the  self-
employed have to contribute to either of the two. Moreover, the self-employed are not generally 
obliged to contribute to compulsory pension insurance. However, certain groups of self-employed 
are obliged to contribute to statutory pension insurance. Compulsory pension insurance applies 
for  self-employed  teachers  without  employees,  nurses,  midwives,  artists,  publicists,  and 
craftsmen. 

Thus,  only  contributions to  the statutory  pension insurance  and to statutory  as well as  private 
health  insurance  have  been  simulated  for  the  self-employed.  Mandatory  contributions  to  the 
statutory pension insurance have been limited to those specific groups obliged to contribute, i.e. 
eligibility to pension insurance contribution is restricted to working either in education services, 
or in health services (lindi=10 or lindi=11), assuming that all income from self-employment in 
these  services  is  subject  to  mandatory  contributions  to  the  statutory  pension  insurance.  It  is 
assumed that those obliged to contribute have to pay the entire rate (18.6% in 2021-2024). 

The self-employed have in general been identified by their income, rather than their labor status. 
This means simulations are based on income from self-employment (yse). Thereby, there may be 

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individuals who pay contributions on both their pension income (il_pen) and on their income from 
self-employment  (yse),  but  always  in  relation  to  respective  income.  However,  eligibility  is 
restricted  to  not  reporting  labor  status  employee  (les=3),  as  the  employees  already  pay 
contributions on their income from employment (yem). 

Table 2.15 Self-employed Social Security Contribution rates[1] (in %) 

1. Compulsory statutory pension insurance (tscsepi_s) 

2. Compulsory statutory health insurance (tscsehl_s) 

Total (tscse_s) 

2021 

2022 

2023 

2024 

18.6 

15.9 

34.5 

18.6 

15.9 

34.5 

18.6 

16.2 

34.8 

18.6 

16.3 

34.9 

Notes: [1] These are the contribution rates to statutory pension insurance and to statutory health insurance 
that have been assumed in the simulation for the self-employed (in health and education services only, for 
pension insurance). Long-term insurance, unemployment insurance, and accident insurance have not been 
simulated for the self-employed. 

Self-employed with income from self-employment (yse) below the threshold for statutory health 
insurance,  who  do  not  report  to  be  employees  or  civil  servants,  are  assumed  to  contribute 
voluntarily to the statutory health insurance. They have to pay double the rate of employees as 
they  have  to  pay  the  employer’s  share,  too.  For  them,  the  income  base  that  determines  the 
contribution is the sum of income from self-employment, income from capital, and income from 
renting and leasing. Since 2009, there is a minimum and a maximum amount for this income. 

Self-employed with income from self-employment (yse) above the threshold for statutory health 
insurance, who do not report to be employees or civil servants, are assumed to opt for private 
health  insurance.  In  private  health  insurance,  contributions  do  not  depend  on  income,  but  on 
individual  characteristics,  like  health  status,  age,  and  individual-specific  illness  risks.  In  the 
EUROMOD simulations, average contributions to private health insurance by the self-employed 
have been imputed. These averages are taken from the SOEP micro data. Contributions to private 
health  insurance  are  not  part  of  the  income  list  ils_sicse  to  ensure  that  fiscal  aggregates  are 
matched  better.  The  simulated  contributions  to  private  health  insurance  are  stored  under  the 
variable xhi_s. 

Contribution rates for self-employed in the statutory systems are shown in Table 2.15. Income 
thresholds and contributions have not been adjusted according to the actual number of months 
spent in employment (yemmy) during the year, in order to account for the fact that income from 
self-employment is distributed highly unevenly over the year. Unit of analysis is the individual. 

2.7.4  Pensioner Social Contributions (tscpe_de) 

Pensioners  only  have  to  contribute  to  the  health  insurance  and  to  long-term  care  insurance. 
Depending on their pension income, they are assumed to be either insured compulsorily in the 
statutory  health  and  thereby  also  the  long-term  care  insurance,  or  in  the  respective  private 
insurances (see the thresholds above). If pensioners are insured in the statutory insurances, they 
must pay 8.10% for health insurance and 3.4% for long-term care insurance in 2024. Accordingly, 
to employees, childless pensioners, born after 1939 and older than 23, have to pay an add-on of 
0.6% to long-term care insurance. The rates are tabulated in Table 2.16. 

Pensioners,  with  income  from  public  pensions  (ils_pen)  exceeding  the  threshold  for  statutory 
health insurance, are assumed to opt for private health insurance. As for employees and the self-
employed,  average  contributions  made  by  pensioners  in the  SOEP  data have  been  imputed  as 
contributions to private health insurance for the pensioners. 

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Table 2.16 Pensioners’ Social Security Contribution rates (in %) 

1. Compulsory statutory health insurance (tscpehl_s) 

2. Statutory long-term care insurance (tscpeci_s) 

3. Additional LTC contribution: childless (tscpeci_s) 

Total (tscpe_s) 

2021 

2022 

2023 

2024 

7.95 

3.05 

0.25 

7.95 

3.05 

0.25 

8.10 

3.05 

0.25 

8.15 

3.40 

0.6 

11.25  11.25  11.40  12.15 

Simulations condition on not being a civil servant, assuming that this implies that pensioners have 
not been a civil servant earlier in life. Income thresholds and contributions are adjusted according 
to  the  actual  number  of  months  spent  in  retirement  during  the  year.  Unit  of  analysis  is  the 
individual. 

2.7.5  Other Social Contributions (tscot_de) 

Individuals who do not fall into the categories of employees, self-employed and pensioners and 
who are not family insured (familienversichert, see Section 1.3) are required by law to contract a 
health and long-term  care insurance. These individuals  are free to choose  between  public  and 
private insurances. In EUROMOD it is assumed these individuals are publicly insured with the 
lowest  possible  health  insurance  contribution  (as  they  have  no  or  very  low  earnings).  That  is 
computed  as  the  regular  contribution  rates  for  health  and  long-term  care  insurances  for  both 
employers and employees, which are then applied to a fictional minimum monthly income which 
is determined by the government each year (i.e. set by legislation) and deemed necessary to cover 
the most basic needs. Students who are older than 25 are offered a special – cheaper – contribution 
amount  to  the  health  and  long-term  care  insurance.  The  students'  contribution  is  also  set  by 
legislation by the government. Table 2.17 tabulates the fictional minimum monthly amount to 
which the regular contribution is applied and the special contribution amount for students older 
than 25. 

Table 2.17 Minimum health and long-term care insurance contributions (in Euro per month) 

1. Fictional minimum monthly income 

2021 

2024 
1096.67  1096.67  1131.67  1178.33 

2022 

2023 

2. Contribution of students older than 25 

106.56 

111.45 

123.59 

133.33 

Civil servants or the partners of civil servants are not liable for the contribution.  

The following benefits cover the contribution (tscot_s): (most of) the old-age (poa) and disability 
benefits  (pdi),  unemployment  Benefits  I  (bunct_s),  sickness  benefits  (bhl_s),  parental  leave 
benefits (bplct_s), citizen’s benefit (bunnc_s), social assistance for old-age and for reduced work 
ability (bsaoa_s) and general social assistance (bsa00_s). If the person or their family receive any 
of these benefits, then the contribution is set to zero (because the state pays the contribution). 

Education benefits (bed_s) also cover the contribution. If a student is liable for the contribution, 
then the benefit amount is increased to cover the tscot_s amount. Tscot_s is also taken into account 
when  calculating  the  relevant  income  for  the  means  test  of  housing  benefits  (bho00_s)  and 
additional child benefits (bchot_s), and it is (at least partially) covered by the benefits to the extent 
that the contribution lowers the relevant income for the means test. 

EUROMOD modelling: If a person cannot afford to pay the contribution but they do not qualify 
for any benefit covering it (e.g. because of too much wealth, or because they have not claimed the 

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EUROMOD Country Report – GERMANY 

benefits  they  are  entitled  to),  then  they  are  obliged  to  sell  part  of  their  wealth  to  pay  for  the 
contribution.  Such  behavioural  response  is  complicated  to  model  (e.g.  there  can  be  feedback 
effects to the  level  of  income  tax/ benefit entitlement). Thus,  at the  expense  of not  modelling 
accurately  the  contribution  policy,  we  assume  that  if  the  family’s  net  income  is  less  than  the 
contribution,  the  person  would  not  pay  it  (or  they  have  sold  part  of  their  wealth,  paid  for  the 
contribution and broke even w.r.t net income). 

2.8  Direct taxes 

Income  tax  is  levied  on  the  income  of  natural  persons.  Tax  on  income  from  dependent 
employment  is  collected  from  persons  in  dependent  employment  at  source  via  payroll  tax. 
However, these pre-payments on income are not final, so that usually income tax is declared at 
the end of the year, where pre-payments from payroll tax are considered, but also other sources 
of income that are not related to dependent employment come into play. 

The simulation of personal income tax is divided into three policies. In the first policy (tin_de), 
taxable  income  is  derived,  and  in  the  following  two  policies  (tinit_de  and  tinjt_de),  the  tax 
schedule function is applied to individual and respectively joint taxation. 

2.8.1  Taxable Income (tin_de) 

In this policy, taxable income is derived. First of all, parameters for the tax schedule, as well as 
for allowances and deductions are defined. Then, income from the various sources, as far as it is 
taxable,  is  collected  (see  Table  2.18).  Unit  of  analysis  when  deriving  taxable  income  is  the 
individual.  In  case  relevant  parameters  differ  by  individual  and  joint  taxation  (namely  capital 
income), these components of taxable income are added later in the respective policy. 

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Table 2.18 Determination of taxable income according to German Income Tax Law (§ 2 EStG) 

EStG 
§§ 13 - 14a 
§§ 15 - 17 
§ 18 
§ 19 
§ 20 
§ 21 
§ 22 
§ 2 III 

§ 2 III 
§ 24a 
§ 13 III 
§ 24b 

Legal income concepts and their components 
Income from agriculture and forestry  
+ Income from business enterprise  
+ Income from self-employment  
+ Income from dependent employment  
+ Income from capital  
+ Income from renting and leasing  
+ Other income  
= Positive income from all sources  
– Negative income (loss compensation) 
= Income from all sources  
– Tax allowance for elderly persons (for people over 64)  
– Tax allowance for agriculture and forestry  
–  Single  parents’  tax  allowance  (Entlastungsbetrag  für 
Alleinerziehende)  
= Adjusted gross income  
– Special expenses (actual or lump-sum)  
– Extraordinary burden expenses (actual or lump-sum)  
– “Loss deductions” (reimbursements, loss carry forwards)  § 10d 
§ 2 IV 
= Income  
§ 32 VI 
– Tax allowance for children (Kinderfreibetrag)  
§ 2 
= Taxable income (the tax base) 
Progression Clause (Progressionsvorbehalt) 
§ 32b 
+ Unemployment Benefits 
+ Short-term Work Compensations 
+ Insolvency Benefits 
+ Severance Benefits 
+ Parental-leave Benefits 
+ Sickness benefits  
+ Injury Benefits 
+ Sickness Benefits for Military People 
+ Maternity-leave Benefits 
+ Transfer Short-term Work Compensations 
+ Seasonal Short-term Work Compensations 
+ Unemployment Benefits for Part-time Unemployment 
+ Benefits for Early Retirement 
+ Supplemented labour costs for employment 
=  Taxable  income  according  to  p.c.  (determining  the  tax 
rate) 
Source: Steiner, Wrohlich, Haan, and Geyer (2008). 

§ 32b 

§ 2 III 
§§ 10 - 10c 
§§ 33 – 33c 

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  Tax Base 

Income  from  employment,  from  self-employment,  from  property,12  from  other  sources,  and 
income in kind is entirely taxable and thus added up as observed (il_taxy). Since 2005, income 
from pensions is only taxable with a pre-defined share, which depends on the (calendar) year of 
entrance into retirement in case of private pensions and on the age at entrance into retirement in 
case of statutory pensions, and it remains constant, conditional on these two.  

  Tax Allowances 

Then, various allowances and deductions, which are assessed at the individual level, are deducted 
from  “taxable  income  before  allowances”.  Below  there  is  an  explanation  of  all  simulated 
allowances and deductions.  

a)  Allowance on income from pensions (Rentenfreibetrag) (EUROMOD variable tintape_s) 

The  tax  treatment  of  pension  income  depends  on  the  year  in  which  each  individual  enters 
retirement.  Given  that  information  on  retirement  entry  is  not  available,  the  simulation  of  this 
allowance assumes that individuals have entered retirement at age 65. For those individuals for 
whom we observe pension income at a younger age in the input data, we assume that they have 
entered  retirement  in  each  policy  year.  The  amount  of  the  allowance  on  pension  income  also 
depends on the concrete source: 

- 

- 

- 

pensions from statutory sources (poass, poa00, poaps, poapu): for those entering retirement 
in  2005  or  before,  the  allowance  amounts  to  50%  of  their  pension.  Every  year,  this  rate 
diminishes by 2 percentage points until 2020, by 1 percentage point in 2021 and 2022 and by 
0.5 percentage point since 2023 until pensions will be fully subject to income taxation in 2040 
(e.g. for those entering retirement in 2024 the allowance amounts to 17% of their pension). 
pensions  for  civil  servants  (poacs):  for  those  entering  retirement  in  2005  or  before,  the 
allowance amounts to 40% of their pension, capped at a maximum of 3,000 Euro per year. 
Every year, this rate diminishes by 1.6 percentage points until 2020, by 0.8 percentage point 
in 2021 and 2022 and by 0.4 percentage points since 2023 (e.g. for those entering retirement 
in 2024, the allowance amounts to only  13.6% of their pension, capped at a maximum of 
1,020 Euro per year). 
private pensions (ypp): under the assumption that all individuals enter retirement at age 65, 
the allowance on private pensions amounts to 82% and has stayed constant over the years. 

b)  Tax-exemption from Minijob earnings (EUROMOD variable tintcly_s) 

Earnings from Minijobs (i.e. dependent employment paying up to 520 Euro per month) are tax 
exempt. 

c)  Allowance  on  income  from  the  elderly  (Altersentlastungsbetrag;  EUROMOD  variable 

tinta00_s) 

This allowance applies to all income sources with the exception of pension income received by 
people aged 65 and older. The amount of the allowance depends on the individuals’ year of birth 
and  decreases  the  younger  individuals  are.  For  each  cohort,  the  allowance  is  calculated  as  a 
percentage of income, capped at a maximum. 

d)  Deduction  of  income-related  expenses  (Werbungskostenpauschale;  EUROMOD  variable 

tintaee_s) 

12 Income from property is income from renting and leasing of non-owner occupied housing. This has 
been subject to personal income tax in all the years throughout 2020 to 2023. The change at the taxation 
of capital income does not apply to income from property. 

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There  is  a  lump-sum  allowance  of  1,230  Euro  per  year  that  is  applied  in  case  income  from 
employment  (yem)  exceeds  1,230  Euro  and  the  individual  does  not  claim  income-related 
expenses, e.g. for commuting to the work place or for work equipment, exceeding the threshold 
of 1,230 Euro per year. In EUROMOD only this lump-sum allowance is simulated. This decision 
is likely to undersimulate the deduction of income-related expenses for certain groups of people, 
such  as  those  with  a  long  commute  to  work  whose  costs  exceed  the  1,230  Euro  per  year. 
Unfortunately, there is no information available which could be used to simulate this deduction 
more accurately. 

e)  Allowance on earnings from agriculture (EUROMOD variable tintaag_s) 
There is also a tax allowance for taxpayers in the agriculture and forestry sector. It amounts to 
900 Euro per year for a single person (1,800 Euro for couples), but it is only granted in case total 
income from employment does not exceed 30,700 Euro per year (61,400 Euro for couples). This 
allowance was constant over the years. 

f)  Allowance for single parents (Entlastungsbetrag für Alleinerziehende; EUROMOD variable 

tintalp_s)  

There is an allowance for single parents which amounted to 4,008 Euro per year for 2021 and 
2022. In 2023, the allowance increased to 4,260 Euro per year and stayed constant in 2024. In 
addition, the allowance is further increased by 240 Euro per year for each additional child in the 
household. 

g)  Deduction of old-age expenses (EUROMOD variable tintapv_s)  
Deductions of old-age expenses are made up of the sum of two components: one based on the 
contributions made to the pension insurance and one based on the contributions made to health 
and long-term care insurance. The first component is computed as follows in two steps: first, all 
contributions  (including  employers’  contributions)  made  to  the  pension  insurance  up  to  a 
maximum, which changes every year (25,787 Euro per year in 2021,  25,639 Euro in 2022, 26,528 
Euro in 2023 and 27,566 Euro in 2024), are computed. Then, the allowance is computed as a 
percentage of this amount, which increases by 2 percentage points every year (i.e. was 88% in 
2019;  90%  in  2020;  etc)  and  reaches  100%  in  2023,  minus  the  employer’s  contribution.  The 
second  component  consists  of  all  contributions  made  to  health  and  long-term  care  insurance, 
regardless of the (non-) employment status of individuals. 

h)  Deduction of childcare expenses (EUROMOD variable tintace_s) 
Parents also can deduct two thirds of their childcare expenses up to a maximum of 4,000 Euro per 
year.  Given  that  we  do  not  have  any  information  on  actual  childcare  expenses,  EUROMOD 
simulates the totality of the deduction for working parents with children up to the age of 12 who 
attend  pre-school  or  primary  school  combined  with  paid  childcare.  For  couple  parents,  the 
deduction  is  only  simulated  if  both  parents  work.  This  is  no  part  of  the  policy  but  rather  a 
calibration of the simulation, as families with a stay-home parent are likely to use less hours of 
paid childcare. Due to missing data on the actual take-up of paid child-care from 2023 on, we 
only consider children in pre-school for the deduction. 

i)  Deduction of special expenses: alimonies (EUROMOD variable tintasp_s) 
Alimony payments (variable xmpam) can also be deducted up to a maximum of 13,805 Euro per 
year, which has stayed constant over the years. 

j)  Child tax allowance (Kinderfreibetrag) (EUROMOD variable tintach_s) 
The child tax allowance is granted to parents instead of child benefits in case the allowance is 
more beneficiary for the taxpayers than the child benefits. The allowance per couple amounted to 
8,388 Euro in 2021 and 2022, 8,952 Euro in 2023 and 9,312 Euro in 2024. Since 2000, it includes 

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an allowance for childcare. In the case of couple’s separation, each parent is entitled to half of the 
allowance (4,194 Euro in 2021 and 2022, 4,476 Euro in 2023, 4,656 Euro in 2024). 

EUROMOD modelling: In the case of couple’s separation, if one of the parents does not pay at 
least 75% of the maintenance allowance, then the other parent can claim the full amount of the 
tax allowance. Since we do not have detailed information on maintenance payments, we assume 
that lone parents always claim half of the allowance. Furthermore, we can only identify eligible 
parents if the children reside with them.  

Accounting for all these allowances and deductions, “taxable income” follows.  

2.8.2 

Individual Taxation (tinit_de) 

In this policy (tinit_de), the tax function is applied to the case of individual taxation. Generally, 
the simulation of the tax function is structured as follows:  

1)  Firstly, the relevant average tax rate is determined for all individuals who are subject to 
individual taxation, by applying taxable income and further accounting for progression 
clause (by adding related benefits to taxable income). Taxable income including benefits 
is  put  into  the  schedule,  and  a  tax  burden  is  returned.  This,  however,  is  not  the  final 
burden, it only determines the rate. The resulting average tax rate  – applied to taxable 
income, excluding benefits – determines the relevant tax burden. This is the tax burden, 
before accounting for the child allowance. 

2)  Secondly,  the  child  allowance  is  accounted  for,  in  case  it  applies.  It  applies  if  the 
individual  has  at  least  one  dependent  child  in  the  household  that  is  eligible  for  child 
benefits (see Section 1.2.5 for eligibility criteria). The child allowance reduces taxable 
income if it applies. The tax burden is derived again. Again, progression clause must be 
accounted for, i.e. benefits are considered when the tax rate is determined, but they are 
excluded from the actually taxed income. 

3)  Now, a higher-yield test is undertaken in order to determine which of the two is more 
profitable for the tax unit, the application of the child allowance, or the receipt of child 
benefits. The reduction of tax burden resulting from the application of the allowance is 
compared to the annual receipt of child benefits for all eligible dependent children of the 
tax unit. If child benefits are more profitable, the child allowance is not applied. In case 
the child allowance is more profitable, it is applied and the sum of received child benefits 
is added to the tax burden (also see below at Tax Allowances). The child allowance  is 
usually more beneficial for the high-income individuals. 

4)  Next,  tax  burdens  for  the  two  groups,  the  childless  and  individuals  with  children  are 

assembled in the variable tinit_s. 

5)  Then, if applicable, the solidarity surcharge is computed (variable txc_s). If the income 
tax  liability  is  less  than  the  tax  exemption  threshold  (of  18,130  Euro  per  year),  no 
solidarity  surcharge  is  due.  If  the  income  tax  exceeds  the  tax  exemption  threshold,  a 
solidarity  surcharge  of  5.5%  is  levied  on  the  income  tax.  However,  the  solidarity 
surcharge  cannot  be  higher  than  11.9%  of  the  income  tax  amount  exceeding  the  tax 
exemption threshold. 

6)  Finally, the solidarity surcharge is added to the previously computed tax burden, which 
is saved in the variable tinit_s. This is the relevant tax burden for each individual, and an 
average tax rate follows.  

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  Tax Unit 

Individual taxation has been simulated for all individuals who are either not married or who are 
married but do not live with a partner in the same household. The unit of analysis thus is the 
individual, in the entire policy. There is no need to allocate any income, allowance, or tax burden 
among partners, as each of them is taxed entirely individually, if subject to individual taxation. 

  Tax Exemptions 

There are a  couple of  exemptions  in  German  income  tax law.  As  described  before,  a  specific 
element of the German income tax law is the progression clause. Even though not included in the 
tax  base,  most  of  the  contributory  benefits  are  included  in  the  base  used  to  determine  the  tax 
bracket  of  the  progressive  income  tax  schedule.  In  this  way  these  incomes  may  increase  the 
income tax rate used for the other income sources that are subject to the income tax. 

Progression  clause  is  implemented  in  the  simulation  of  individual  taxation.  The  contributory 
benefits  that  are  subject  to  progression  clause  are  added  to  taxable  income,  and  the  resulting 
income  determines  the  relevant  tax  bracket  and  rate.  This  rate  in  turn  is,  however,  applied  to 
taxable income, excluding the contributory benefits. 

  Tax Allowances 

The tax allowances are described in Section 2.8.1. 

EUROMOD modelling: The child tax allowance needs specific treatment in the simulation. Due 
to the higher yield test, i.e. the check whether the child allowance is more beneficiary for the 
taxpayers than the child benefits, income taxation needs to be simulated twice, once with and 
once without the child allowance. At individual taxation, the entire child allowance is considered 
at each parent filing individual taxation. 

  Tax Base 

Income from six different sources is summed up for each individual. After loss compensation and 
several  allowances  and  deductions  are  considered,  taxable  income,  i.e.  the  tax  base,  is  taxed 
according to a progressive tax schedule. Table 2.18 shows in more detail how taxable income is 
determined. Income from single components is added up and certain expenditures are credited 
against income, as well as certain allowances are granted. This has been described in detail in 
Section 2.8.1. In this policy (tinit_de), in addition capital income is added, and the relevant taxable 
income results. 

EUROMOD modelling: Losses are not observed in the data. Thus, they are assumed to be zero, 
or negligibly small, such that they can be neglected in the simulation.  Also, any other specific 
extraordinary burden expenses that are not observed in the data are assumed to be negligible and 
are not considered in the simulation. 

  Tax Schedule 

The tax schedule from the personal income taxation in Germany has progressive elements (see 
Error! Reference source not found. and following). Due to a basic tax-free allowance (9,744 
Euro in 2021, 10,347 Euro in 2022, 10,908 Euro in 2023 and 11,608 Euro in 2024) and several 
tax brackets beyond this allowance, the entire schedule has a progressive effect. 

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Table 2.19 Personal Income Tax Schedule (2021) 

Bracket 

1 

2 

3 
4 
5 

Lower limit 
(for Y) 
0 

Upper limit 
(for Y) 
9,744 

Marginal Tax 
Rate (%) 
0 

9,745 

14,753 

14,754 
57,919 

57,918 
274,612 

274,613 

- 

14-24 

24-42 
42 

45 

Tax Burden (TAX) 

TAX = 0 (tax-free allowance) 
TAX = (995.21*Z1 + 1,400)*Z1 
Z1 = (Y – 9,744 )/10 000 
TAX = (208.85*Z2 + 2,397)*Z2 + 950.96 
Z2 = (Y – 14,753)/10,000 
TAX = 0.42*Y – 9,136.63  

TAX = 0.45*Y – 17,374.99 

Table 2.20 Personal Income Tax Schedule (2022) 

Bracket 

1 

2 

3 
4 
5 

Lower limit 
(for Y) 
0 

Upper limit 
(for Y) 
10,347 

Marginal Tax 
Rate (%) 
0 

10,348 

14,927 
58,597 

14,926 

58,596 
277,825 

277,826 

- 

14-24 

24-42 
42 

45 

Tax Burden (TAX) 

TAX = 0 (tax-free allowance) 
TAX = (1088.67*Z1 + 1,400)*Z1 
Z1 = (Y – 10,347)/10 000 
TAX = (206.43*Z2 + 2,397)*Z2 + 869.32 
Z2 = (Y – 14,926)/10,000 
TAX = 0.42*Y – 9,336.45  

TAX = 0.45*Y – 17,671.20 

Table 2.21 Personal Income Tax Schedule (2023) 

Bracket 

1 

2 

3 
4 
5 

Lower limit 
(for Y) 
0 

Upper limit 
(for Y) 
10,908 

Marginal Tax 
Rate (%) 
0 

10,909 

16,000 
62,810 

15,999 

62,809 
277,825 

277,826 

- 

14-24 

24-42 
42 

45 

Tax Burden (TAX) 

TAX = 0 (tax-free allowance) 
TAX = (979.18*Z1 + 1,400)*Z1 
Z1 = (Y – 10,908)/10,000 
TAX = (192.59*Z2 + 2,397)*Z2 + 966.53 
Z2 = (Y – 15,999)/10,000 
TAX = 0.42*Y – 9,972.98  

TAX = 0.45*Y – 18,307.73 

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Table 2.22 Personal Income Tax Schedule (2024) 

Bracket 

1 

2 

3 
4 
5 

Lower limit 
(for Y) 
0 

Upper limit 
(for Y) 
11,604 

Marginal Tax 
Rate (%) 
0 

11,605 

17,005 

14-24 

17,006 
66,761 

66,760 
277,825 

277,826 

- 

24-42 
42 

45 

Tax Burden (TAX) 

TAX = 0 (tax-free allowance) 
TAX = (922.98*Z1 + 1,400)*Z1 
Z1 = (Y – 11,604)/10,000 
TAX = (181.19*Z2 + 2,397)*Z2 + 
1025.38 
Z2 = (Y – 17,005)/10,000 
TAX = 0.42*Y – 10,602.13  

TAX = 0.45*Y – 18,936.88 

Taxable income falls into five different tax brackets. There is a basic tax allowance. Within the 
progressive tax schedule, the lowest marginal tax rate is at 14% and the highest at 45%. The latter 
applies to a taxable income above 277,826 Euro in 2023 and 2024. The only flat areas, where the 
tax rate is constant, are in this highest bracket and in the second highest bracket, where a tax rate 
of  42%  applies.  Up  to  a  marginal  tax  rate  of  42%,  the  tax  rate  increases  continuously  and  is 
determined by two different equations that apply within the two brackets. 

This tax schedule is the base for all simulations, i.e. it applies to the determination of the relevant 
tax rate when accounting for progression clause, either with or without accounting for the child 
allowance. It also applies identically to individual and to joint taxation. At the latter it applies to 
the mean income of the spouses. This means that the bracket thresholds are, loosely speaking 
doubled in case of joint taxation. 

EUROMOD modelling: Several elements of the tax schedule (e.g. Z1 and Z2) are computed in 
temporary variables during the simulation (in the form of int_##_s). These are only applied within 
the  tax  schedule  at  the  computation  of  the  tax  burden  and  have  no  further  function  in  the 
simulation. 

  Tax Credits 

There are no explicit tax credits in German income tax law. Any allowances and deductions are 
only  applied  as  far  as  taxable  income  is  greater  than  zero.  There  is  no  such  case  that  taxable 
income can be negative and a tax credit is refunded. 

2.8.3  Joint Taxation (tinjt_de) 

In the German income tax system, married couples are taxed jointly with full income splitting, 
i.e. the tax function is applied to half of the sum of the spouses’ taxable incomes, and then the 
resulting tax amount is doubled. In the simulation (tinjt_de), joint taxation has been implemented. 
It is assumed that all married couples, i.e. those who report to be married and live together with a 
partner, opt for joint taxation. Married couples can only be better off or indifferent when choosing 
joint  taxation,  but  never  be  worse  off  than  when  choosing  individual  taxation.  For  all  other 
individuals, individual taxation has been simulated. 

In this policy (tinjt_de), the tax function is applied to the case of joint taxation. Generally, the 
simulation  of  the  tax  function  is  structured  in  the  same  way  as  for  individual  taxation,  some 
detailed differences apply: 

1)  First,  the  relevant  average  tax  rate  is  determined  for  all  married  couples,  by  applying 
taxable income and again accounting for progression clause (by adding related benefits 

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to taxable income). Now, the crucial difference to individual taxation is that for married 
couples their mean income is applied, i.e. their taxable incomes, including benefits from 
progression clause, and after accounting for all allowances, are summed up over the two 
spouses  and  divided  by  two.  This  is  the  relevant  taxable  income  of  the  couple.  This 
taxable income is put into the schedule, and a tax burden is returned. Again, this is not 
the final burden, it only determines the rate. The resulting average tax rate -- applied to 
taxable income, excluding benefits – determines the relevant tax burden. This tax burden 
is multiplied by two in order to account for the fact that only half of the spouses’ income 
is put into the schedule. This is the relevant tax burden of the couple, before accounting 
for the child allowance. 

2)  Secondly, the child allowance is accounted for, in case it applies. It applies if the married 
couple has at least one dependent child in the household that is eligible for child benefits 
(see Section  1.2.5 for eligibility criteria). The amount of the allowance is doubled for 
married spouses (also see below at Tax Allowances). The child allowance reduces taxable 
income  if  it  applies.  The  tax  burden  is  derived.  Again,  progression  clause  must  be 
accounted for, i.e. benefits are considered when the tax rate is determined, but they are 
excluded from the actually taxed income. 

3)  Thirdly, the higher-yield test is undertaken in order to determine which of the two is more 
profitable for the tax unit, the application of the child allowance, or the receipt of child 
benefits. This is done analogously to individual taxation. 

4)  Then, the resulting tax burden is allocated among the two married spouses, according to 
their  taxable  income.  This  is  the  relevant  tax  burden  for  each  married  spouse,  at  the 
individual level, i.e. assigned to each spouse. 

5)  Next, if applicable, the solidarity surcharge is computed (variable txc_s). The solidarity 
surcharge for joint taxation is calculated in the same way as for individual taxation. The 
tax  exemption  threshold  is  of  36,260  Euro  per  year  (twice  the  amount  for  individual 
taxation) (for more details see Section 2.6.2). Analogously to the regular tax burden, it is 
first  computed  at  the  couple  level  and  then  allocated  among  the  two  married  spouses 
according to their taxable income. It is then added to the regular tax burden.  

6)  Finally, tax burdens (including the solidarity surcharge) for the two groups of spouses, 
childless couples and couples with children, are assembled and added to the tax burden 
of those taxed individually (tin_s). Again, an average tax rate can be calculated. 

  Tax Unit 

Generally, in joint taxation, the unit of analysis is the couple of married spouses. This is necessary 
to account for the fact that for married spouses, incomes are summed up and tax burdens in turn 
allocated. However, when the schedule is actually applied to the mean income of the spouses, it 
only  needs  to  be  applied  to  the  head  of  the  household,  as  the  relevant  taxable  income  of  the 
married  couple  (temp_11_s)  has  been  assigned  to  the  head.  Thus,  for  the  simulation  of  the 
schedule, the unit of analysis technically is the individual, i.e. the household head. 

EUROMOD  modelling:  Generally,  the  head  of  the  household  of  a  married  couple  need  not 
necessarily be one of the spouses of the couple. In multi-generational households, there can be 
more than one married couple. In the data for Germany, however, there is no household with more 
than one married couple. Therefore, the simplification of assigning taxable incomes of the married 
couple to the household head is appropriate. 

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  Tax Exemptions 

As for individual taxation, the benefits that are subject to progression clause are generally exempt 
from income tax. Also at joint taxation, progression clause is implemented in the simulation. 

  Tax Allowances 

The tax allowances are described in Section 2.8.1. 

EUROMOD modelling: Also at joint taxation, the child tax allowance needs specific treatment 
in the simulation. Due to the higher yield test, i.e. the check whether the child allowance is more 
beneficiary for the taxpayers than the child benefits, income taxation needs to be simulated twice, 
once with and once without the child allowance. 

  Tax Base 

Firstly, for each spouse separately, income from six different sources is summed up, and several 
allowances  and  deductions  are  accounted  for  (already  in  policy  tin_de).  This  income  is  then 
summed up over the two married spouses and the average income is applied. This is the relevant 
taxable income for the couple, which is the tax base. 

  Tax Schedule 

The same tax schedule, as for individual taxation, also applies to joint taxation (see Table 2.19 to 
Table 2.22). At the latter it applies to the mean income of the spouses. This means that the bracket 
thresholds are, loosely speaking doubled in case of joint taxation. 

EUROMOD modelling: Again, several elements of the tax schedule (e.g. Z1 and Z2) are computed 
in temporary variables during the simulation (in the form of  int_##_s). These are only applied 
within the tax schedule at the computation of the tax burden, and have no further function in the 
simulation. 

  Tax Credits 

There are also no explicit tax credits that apply to joint taxation in German income tax law. 

2.8.4  Capital Income Taxation (tinkt_de) 

Since  2009  there  is  a  final  withholding  tax  on  capital  with  a  flat  tax  rate  of  25%13,  which  is 
simulated in policy tinkt_de. This rate applies above a saver’s tax allowance, which amounts to 
1000 Euro for single persons in 2024 – for couples, it is doubled. 

  Tax Unit 

The tax unit for capital income taxation is the same as the unit for personal income taxation. This 
holds for all the years 2021-2024. It is again assumed that married couples choose joint taxation. 
Thus, capital income for married couples is joint income and accordingly, married couples get 
granted double the tax-free allowance on capital income. 

  Exemptions 

There are no exemptions for capital income taxation. All income that is considered capital income 
is  subject to  capital  income  taxation. This holds  for interest  income  from  savings  accounts  or 

13 The rate of 25% excludes the solidarity surcharge of 5.5% on the tax burden. The effective rate would 
be  26.375% (excluding church taxes of 8% or 9%, depending on confession). However, church taxes 
have not been simulated in EUROMOD. 

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bonds, as well as for dividends and other pay-outs. It also holds for gains from price arbitrage 
sales of assets. 

  Tax Allowances 

There is a basic allowance for income from capital, which was increased to 1,000 Euro. Income 
from the investment of capital is tax exempt as far as it falls below this threshold. For married 
couples, the double of this allowance is granted. 

Table 2.23 Capital Income Taxation: Basic Allowance (2021-2024) 

Allowances 

- Singles 
- Married Couples 

  Tax Base 

2021 

801 
1,602 

2022 

801 
1,602 

2023 

1,000 
2,000 

2024 

1,000 
2,000 

The tax base is all income from capital. This is interest income from savings accounts or bonds, 
as well as from dividends and other pay-outs. Also gains from price arbitrage sales of assets, e.g. 
when stocks are bought at a lower price than they are sold, falls under capital income. 

  Tax Schedule 

The tax rate is a flat rate of 25%. 

  Tax Credits 

There are no tax credits for capital income taxation. 

2.9  Consumption taxes 

Consumption taxes simulated in EUROMOD can be divided in two groups: VAT (value added 
tax)  and  excises  (additional  duties  paid  over  consumption,  typically  on  energy,  alcoholic 
beverages, and tobacco).  

Simulated consumption tax liabilities paid by households depend on the tax rules (e.g. the VAT 
rate)  and  on  the  tax  base  (consumption  expenditures  or  quantities).  This  is  why,  to  simulate 
consumption  taxes  in  EUROMOD,  the  input  data  must  contain  information  on  household 
expenditures.  The  expenditures  matched  in  the  EUROMOD  input  files  based  on  SILC  are 
reported directly by households in the HBS surveys at purchasing prices. Therefore, they already 
include the consumption taxes paid.  

 i) VAT (il_tva variable in EUROMOD) is the value-added tax. The model also simulates at high 
disagregation level the VAT liabilities paid for each consumption category (output variables are 
tva01111, tva01112, and so on and so forth, corresponding to COICOP codes 01111 and 01112, 
etc.) 

ii) Excises (il_tx variable in EUROMOD) are additional duties paid over consumption and can be 
classified  in  two  groups:  ad-valorem  excises  (il_txv)  that  depend  on  producer  prices,  and  of 
specific or ad-quantum excises (il_txa) that depend on consumed quantities.  

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Since consumption data from HBS refers to expenditures (price times quantity), for the simulation 
of specific excises information on consumption prices are needed.  

Further  information  on  methodology  and  specific  calculations  and  the  independence  of  these 
consumption taxes is common across countries (this is why they are placed in an add-on and not 
in the policy spine of each country) and can be found in Akoğuz et al (2020)14.  

2.9.1  VAT (il_tva) 

To extract the baseline VAT embedded in the expenditure consumption reported by households 
we only need the VAT rate of the policy system year. VAT rates usually do not vary too much 
across  product,  and  are  typically  three  rates  (standard,  reduced  and  zero),  although  in  some 
countries there are more. 

Table 2.24 VAT rates [2021-2024] 

Standard[1] 
Reduced 

Zero 

Products 

Food,  Transport, 
Cultural 
and 
recreational 
activities, 
accommodation, 
in  2023  Gas, 
from  2021 
to 
2023 restaurants 
Rents,  Medical 
services,  postal 
services, 
education, 
insurances 

2.9.2  Specific excises (il_txa) 

2021 
 19 % 

2022 
19 % 

2023 
19 % 

2024 
19 % 

7 % 

7 % 

7 % 

7 % 

0% 

0% 

0% 

0% 

Specific  excises  apply  to  fossil  energy  products,  electricity,  alcohol  products  and  tobacco 
products. In this case, we collect both tax parameters and consumer prices, to allow the model to 
estimate the implicit quantities behind the reported household consumption expenditure amounts. 
Excise  rates  have  been  constant  except  for  cigarettes  and  fine  cut,  for  which  rates  have  been 
constantly increased. 

Table 2.25 Specific ad-quantum excise rates [2021-2024] 

Products 
Ethyl alcohol 

Wine 

Sparkling Wine 

2021 
1303 Euro 
per 100 l of 
pure alcohol 
0 Euro per 
100 l 
136 Euro per 
100 l 

2022 
1303 Euro per 100 
l of pure alcohol 

2023 
1303 Euro per 100 
l of pure alcohol 

2024 
1303 Euro per 100 
l of pure alcohol 

0 Euro per 100 l 

0 Euro per 100 l 

0 Euro per 100 l 

136 Euro per 100 l 

136 Euro per 100 l 

136 Euro per 100 l 

14  Akoğuz,  Elif  Cansu,  Bart  Capéau,  André  Decoster,  Liebrecht  De  Sadeleer,  Duygu  Güner,  Kostas  Manios, Alari 
Paulus,  and  Toon  Vanheukelom.  A  new  indirect  tax  tool  for  EUROMOD:  final  report.  Technical  Report, 
https://euromod-web. jrc. ec. europa. eu/sites/default/files/2021-03/A% 20new% 20indirect% 20tax% 20tool% 20for% 
20EUROMOD% 20Final% 20Report. pdf, 2020. 

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Beer 

Cigarettes 

Cigars 

Fine cut 

Electricity 

Natural Gas 

Liquefied 
hydrocarbons 
Gas Oil Heating > 50 

Gas Oil Heating <= 50 

Coal and Coke 

Petrol – Leaded 

–  Unleaded 

–  Unleaded 

Petrol 
>10mg/kg 
Petrol 
<=10mg/ 
Gas  Oil  –  Propellant  > 
10mg/kg 
Gas Oil – Propellant <= 
10mg/kg 

0.787 Euro 
per 100 L 
per Plato of 
finished 
product 
98.2 Euro 
per 1000 
pieces 
14 Euro per 
1000 pieces 
48.49 Euro 
Fine cut, per 
kg 
20.5 Euro 
per MWh 
1.53 Euro 
per gigajoule 
60.6 Euro 
per 1000 kg 
76.35 Euro 
per 1000L 
61.35 Euro 
per 1000L 
0.33 Euro 
per 
gigajoule, 1 
GJ = 0.0316 
ton 
721 Euro per 
1000L 
669.8 Euro 
per 1000L 
654.5 Euro 
per 1000L 
485.7 Euro 
per 1000L 
470.4 Euro 
per 1000L 

0.787 Euro per 
100 L per Plato of 
finished product 

0.787 Euro per 
100 L per Plato of 
finished product 

0.787 Euro per 
100 L per Plato of 
finished product 

108.8 Euro per 
1000 pieces 

111.5 Euro per 
1000 pieces 

111.5 Euro per 
1000 pieces 

14 Euro per 1000 
pieces 
49.65 Euro Fine 
cut, per kg 

14 Euro per 1000 
pieces 
54.39 Euro Fine 
cut, per kg 

14 Euro per 1000 
pieces 
54.39 Euro Fine 
cut, per kg 

20.5 Euro per 
MWh 
1.53 Euro per 
gigajoule 
60.6 Euro per 
1000 kg 
76.35 Euro per 
1000L 
61.35 Euro per 
1000L 

20.5 Euro per 
MWh 
1.53 Euro per 
gigajoule 
60.6 Euro per 
1000 kg 
76.35 Euro per 
1000L 
61.35 Euro per 
1000L 

20.5 Euro per 
MWh 
1.53 Euro per 
gigajoule 
60.6 Euro per 
1000 kg 
76.35 Euro per 
1000L 
61.35 Euro per 
1000L 

0.33 Euro per 
gigajoule, 1 GJ = 
0.0316 ton 

0.33 Euro per 
gigajoule, 1 GJ = 
0.0316 ton 

0.33 Euro per 
gigajoule, 1 GJ = 
0.0316 ton 

721 Euro per 
1000L 
669.8 Euro per 
1000L 
654.5 Euro per 
1000L 
485.7 Euro per 
1000L 
470.4 Euro per 
1000L 

721 Euro per 
1000L 
669.8 Euro per 
1000L 
654.5 Euro per 
1000L 
485.7 Euro per 
1000L 
470.4 Euro per 
1000L 

721 Euro per 
1000L 
669.8 Euro per 
1000L 
654.5 Euro per 
1000L 
485.7 Euro per 
1000L 
470.4 Euro per 
1000L 

Table 2.26 Prices of excise products [2021-2024] 

Prices 

2021 

2022 

2023 

2024n 

Ethyl alcohol 

Wine 

Sparkling wine 

Beer 

Cigarettes 

Cigars 

18.32 Euro per 1 
unit of Spirit 

18.89 Euro per 1 
unit of Spirit 

20.24 Euro per 1 
unit of Spirit 

20.74118 Euro per 
1 unit of Spirit 

6.26 Euro per 1 l 

6.55 Euro per 1 l 

7.12 Euro per 1 l 

25.82 Euro per 1 l 

27.05 Euro per 1 l 

29.38 Euro per 1 l 

7.276696 Euro per 
1 l 

30.02659 Euro per 
1 l 

1.79 Euro per 1 l 
of beer 

1.9 Euro per 1 l of 
beer 

2.13 Euro per 1 l 
of beer 

2.183295 Euro per 
1 l of beer 

305.26 Euro per 
1000 pieces 

312.79 Euro per 
1000 pieces 

324.66 Euro per 
1000 pieces 

340.7178 Euro per 
1000 pieces 

278.6 Euro per 
1000 pieces 

313.1 Euro per 
1000 pieces 

339.3 Euro per 
1000 pieces 

359.2113 Euro per 
1000 pieces 

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Other tobacco 

Electricty 

Natural 
Heating 

Gas- 

Liquefied 
hydrocarbons 

Gas Oil- Heating 

Coal  and  Coke  - 
Heating 

Petrol-Unleaded 
>10mg/kg 

Oil- 

Gas 
Propellant 
<=10mg/kg norm 

n: nowcasted 

151.99 Euro per kg  160.66 Euro per kg  179.04 Euro per kg 

188.2016 Euro per 
kg 

326.7 Euro per 
MWh 

342.1 Euro per 
MWh 

420.3 Euro per 
MWh 

410.3133 Euro per 
MWh 

18.33 Euro per 
gigajoule 

23.71 Euro per 
gigajoule 

33.1 Euro per 
gigajoule 

34.05785 Euro per 
gigajoule 

2393.6 Euro per 
1000 kg 

3638.61 Euro per 
1000 kg 

2393.77 Euro per 
1000 kg 

2656.039 Euro per 
1000 kg 

758.22 Euro per 
1000 l 

1368.1 Euro per 
1000 l 

1105.78 Euro per 
1000 l 

1160.618 Euro per 
1000 l 

26.51 Euro per 
gigajoule 

34.77 Euro per 
gigajoule 

51.77 Euro per 
gigajoule 

54.64574 Euro per 
gigajoule 

1582.9 Euro per 
1000 l 

1923.35 Euro per 
1000 l 

1850.08 Euro per 
1000 l 

1881.819 Euro per 
1000 l 

1388.9 Euro per 
1000 l 

1954.39 Euro per 
1000 l 

1727.73 Euro per 
1000 l 

1793.233 Euro per 
1000 l 

Consumer prices of goods subject to excise duties are nowcasted, similarly to what the model 
does  to  update  incomes  from  SILC.  We  combine  the  latest  available  data  from  the  following 
sources: 

  Prices per product, usually from last year, but for instance, fuel prices have only 15 days 

 

 

delay. 
Inflation: Harmonised Index of Consumer Prices (HICP, Eurostat) at COICOP 5 digits, 
usually for the first quarter for beta release and up to third quarter 3 for final release. 
Inflation quarter-on-quarter forecasts (DG ECFIN, confidential) by HICP main groups 
(unprocessed food, processed food including alcohol and tobacco, non-energy industrial 
goods, energy, services - overall index excluding goods) of quarters 2, 3 and 4, as needed 
for each release. 

For more details on the specific source of the price of each good, see Akoğuz et al (2020). 

The price of (indicate product) did not followed this general sources/nowcasting strategy but was 
sourced from (indicate source) because (indicate reason). 

EUROMOD modelling: Consumption taxes (tco_cc policy) require extended EUROMOD input 
data (with imputed income shares of consumption expenditures at the household level) and an 
add-on to run. The policy is set to off in the baseline. To activate it, the CT_xbase add-on must 
be run, and the extended EM input files (see Section 3 for more information on the methodology 
and  features  behind  these  extended  input  files)  should  be  selected  (as  defined  in  the  database 
configuration of each country). The other add-ons (CT_*) are designed for reform simulations 
and assume different behavioural responses: i) constant quantities (CT_XCQ), ii) constant income 
shares (CT_XCIS), and iii) constant expenditure shares (CT_XCES). These reform-scenario add-
ons require the auxiliary output files are generated by running the first baseline simulation (as 
either the quantities or expenditures and savings from the baseline are kept constants and enter as 
inputs in the simulated reform scenarios). 

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3.  DATA 

3.1  General description 

From 2021 onwards, a new database to produce the EUROMOD input data has been provided by 
Eurostat – the EUROMOD SILC databases (EMSD). In general, the EMSD includes the UDB of 
EU-SILC, national data provided by national statistical offices and EUROMOD variables that 
have been imputed by Eurostat using more precise EU-SILC data that underlies certain disclosure 
rules in publicly available data sets. For Germany no national data will be used, making EU-SILC 
the only data source for the German EMSD. 

The German contribution to the EU-SILC has been collected by the national statistical office for 
Germany (Statistisches Bundesamt), under the label “LEBEN IN EUROPA” up to 2020. Every 
year about 14,000 households have been contacted by postal mail, and participation in this survey 
is  voluntary.  Households  were  recruited in random  samples  from  an  access  panel. The  access 
panel consisted of a standing pool of households that have been recruited from the German micro 
census (Mikrozensus). The German micro census consists of a 1% sample of the total German 
population. With the survey year 2020 the German contribution to EU-SILC is integrated into the 
new designed micro census. This constitutes a major change in many ways. Firstly, the sample 
size of German is noticeably larger than under the label “LEBEN IN EUROPA”. It now consists 
of a up to 12% sample from a 90% subsample of the micro census. 

Secondly,  the  random  samples  of  “LEBEN  IN  EUROPA”  have  been  stratified  by  residence 
(federal state), household composition, social status of the household head, and net household 
income. The new integrated EU-SILC survey is a sample of stratified areas based on information 
of the German Census from 2011. 

A  further  major  change  that  comes  with  the  integration  of  the  micro  census  is  that  survey 
respondents are now generally legally obliged to answer the survey. Compared to the previous 
voluntary  participation  in  “LEBEN  IN  EUROPA”  this  leads  to  the  already  mentioned  higher 
sample size, but also to a different, more representative sample. On the other hand, the integrated 
EU-SILC still has voluntary questions which leads to a higher overall number of missing answers. 
In addition, in case of the 2020 survey, non-response to the micro census was not sanctioned due 
to the COVID pandemic leading to a high non-response rate of about 35%.     

The assessment unit is individuals aged 16 or older, living in private households in Germany. The 
target population is the population living in private households in Germany, except for people in 
institutions, i.e. for example soldiers living in military caserns, or old people living in nursing 
homes. A household usually consists of individuals living together and sharing major expenses 
for daily living. Typically, sub-tenants, guests, au-pair people, and domestic staff do not belong 
to the household. 

The  national  SILC  data  have  been  harmonized  by  the  national  statistical  office  to  fulfil  the 
comparability  requirements  of  EU-SILC,  elaborated  and  monitored  at  Eurostat.  The  German 
contribution to EUROMOD is based on the EMSD, provided by Eurostat, in which national data 
has  been  harmonized.  This  was  the  only  source  of  micro  data  that  has  been  utilized  for  the 
development of the German contribution to EUROMOD. There was no possibility for the national 
developer team to get any access to the national German SILC data (before harmonization) at the 
German statistical office at all. 

The newest release of EUROMOD has been prepared for one input dataset based on EU-SILC 
2022.  

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First, we describe the main features of the dataset based on EU-SILC 2022. Some major facts 
about the data base are summarized in Table 3.1.1. The period of collection was February 2022 
to July 2022. The reference period, over which households reported incomes and employment 
status,  was  the  entire  year  2021.  For  other  information,  such  as  social  status,  household 
composition, or living conditions, the reference period is the timing of the interview. As a result, 
the UDB data base consists of 65,893 individuals, living in 32,906 households.  

Table 3.1.1 EUROMOD database description (based on EU-SILC 2022) 

EUROMOD database 
Original name 
Provider  
Year of collection 
Period of collection  
Income reference period 
Sampling 
Unit of assessment  

DE_2022_b1 
UDB (C22_release_23-09) 
Eurostat 
2022 
February 2022 to July 2022 
Year 2021 
Stratified area sample 
Individuals aged 16 and older, living in private households in 
Germany 
Private households[1] 
65,893 individuals in 32,906 households  
14.3% for the overall sample (household level) 

Coverage  
Sample size  
Non-Response rate 
Notes: [1] This covers the entire population living in private households in Germany, except for people 
in institutions, i.e. for example soldiers living in military caserns, or old people living in nursing homes. 
Children born after the income reference period were dropped from the initial sample (173 in total). 

3.2  Data adjustment  

The data have been cleared up such that within household relations are coherent, i.e. assuring that 
young children are not living on their own and that family relations are consistent. Variables for 
the identification number of the person, of the household, and if applicable of the mother and the 
father in the household have been adjusted accordingly. However, these adjustments were only 
of minor relevance in case of Germany. 

For reasons of consistency between demographic variables at the time of the interview and income 
variables that refer to the previous year, age has been assigned at the beginning of the interview 
year. As a consequence, children born after the income reference year and before the interview 
have been excluded from the data set. In the input dataset based on EU-SILC 2021, this drops 127 
individual observations but leaves the number of households unaffected. 

3.3 

Imputations and assumptions 

In this section, the reference time period is described, the relation between gross and net incomes 
is  explained.  In  addition,  disaggregation  techniques  applied  to  disentangle  harmonized  UDB 
benefit  data  are  described,  an  approach  of  approximation  of  the  benefit  entitlement  basis  for 
contributory benefits is illustrated, and the imputation of housing costs, as well as other imputed 
variables is briefly addressed. 

3.3.1  Time period 

The time over which the micro data for EU-SILC has been collected was February 2022 to July 
2022.  

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Demographic  information  has  been  reported  with  reference  to  the  time  of  the  interview.  This 
refers to information at the individual level, such as marital status, social status, and education, as 
well as at the household level, such as tenure status, household composition, and living conditions. 
For reasons of consistency between demographic variables at the time of the interview and income 
variables referring to the previous year, age has been assigned at the beginning of the interview 
year. 

The  reference  period  over  which  households  reported  incomes  was  in  both  cases  the  entire 
previous year (i.e. year 2021 for SILC 2022). This relates to any monetary information, on income 
from  all  sorts  of  sources  (employment  income,  retirement  income,  capital  income,  private 
transfers, and social benefits), as well as any expenditures reported (taxes on income and social 
security contributions and expenditures for housing). 

The reference period for labour market information is two-fold. There is information that refers 
to the time of the interview, such as number of hours usually worked per week in the main job, if 
the person is actively looking for a job, if the person has ever worked before, the person’s current 
employment status, as well as the type of occupation, the position in the job, and the industry of 
employment. Then there is information that refers to the income reference period, i.e. the entire 
previous year, such as employment activity by month, reported in the number of months spent in 
full-time work, part-time work, unemployment, retirement, studying, or inactivity. Then there is 
information that refers to a longer period, such as the number of months ever spent in work (as 
an employee or self-employed), which has been reported as of the time of the interview and which 
refers to the entire working life. 

All monetary information on incomes and expenditures has been converted into monthly averages 
in EUROMOD, regardless of the actual number of months of receipt. This means that, as the 
reference period usually is the entire previous year, incomes and expenditures have been assumed 
to be received, respectively paid, continuously and at the same rate throughout the entire year. No 
additional information on the number of times a particular income or benefit has been received 
throughout the year could have been exploited. 

3.3.2  Gross incomes 

The UDB data for Germany contain information about the sum of direct taxes and social security 
contributions paid during the income reference period (tis). This includes, for the direct taxes, 
personal  income  taxes,  payroll  taxes,  church  taxes,  and  solidarity  surcharge.  For  the  social 
security  contributions,  it  includes  contributions  to  statutory  pension  insurance,  statutory  and 
private  health  insurance,  statutory  and  private  long-term  care  insurance,  and  unemployment 
insurance. There is no single information on any of these components available in the data. 

For most of the income variables, there is only information on the pre-tax values available in the 
SILC  data  for  Germany.  Respective  net  variables  are  either  empty  or  identical  to  the  gross 
variable. Only in case of several social benefits at the individual level (PY090, PY100, PY110, 
PY120, PY130), for some observations, the net variables are filled in and differ from respective 
gross variables. For these observations, a gross-to-net conversion has been undertaken, i.e. taxes 
and social security contributions have been imputed. However, in EUROMOD simulations, only 
gross (pre-tax) information is applied, no net variables are used. Also, the aggregate information 
on taxes and social contributions paid (tis) is only used for validation of EUROMOD simulations, 
but it is not used in the simulations and does not affect them. 

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3.3.3  Disaggregation of harmonized variables 

In the framework of the UDB data, information on individual-/household-level benefit receipt and 
amounts has been aggregated to broader benefit categories for the sake of harmonization across 
countries. For Germany, this aggregate UDB data from  Eurostat was the only source of micro 
data  that  could  have  been  used  for  simulation.  There  has  been  no  possibility  to  validate 
disaggregation or simulation effort with the national data (before harmonization) at all. 

However, in order to simulate policies of the single social benefits, individual-/household-level 
information  on  receipt  and  amounts  of  the  single  benefits  is  indispensable.  Therefore,  the 
disaggregation procedure is explained next. 

Disaggregation of input dataset based on EU-SILC 2022 

The disaggregation of benefits in the input database from 2016 on differs substantially from the 
disaggregation  carried  out  for  older  datasets  (including  EU-SILC  2015  and  older  ones).  The 
reason  is  twofold.  More  recent  EU-SILC  data  sets  include  (roughly)  disaggregated  benefit 
variables according to the concepts ‘(non-)contributory’ and ‘(non-)means-tested’. Starting with 
EU-SILC 2016, the national team has received information from EUROSTAT regarding which 
benefits are included in which EU-SILC disaggregated variables. The following table summarizes 
the detailed benefit disaggregation that is used in the EUROMOD newest input dataset: 

Table 3.2 Disaggregation of Harmonized Benefit Data 
EU-SILC  
variable 

COMMENTS 

EUROMOD  
variable 
Old-age benefits 
poa00 

PY102 

Further disaggregation needed, as PY102 includes other old-
age benefits 
Directly identified in EU-SILC 
Further disaggregation needed, as PY102 includes other old-
age benefits 
Further disaggregation needed, as PY102 includes other old-
age benefits 
Further disaggregation needed, as PY102 includes other old-
age benefits 
Variable  not  disaggregated  in  EU-SILC;  identified  as  the 
residual not contained in PY101-PY104 
Further disaggregation needed, as PY102 includes other old-
age benefits 
Directly identified in EU-SILC 
Variable  not  disaggregated  in  EU-SILC;  identified  as  the 
residual not contained in PY101-PY104 

Further disaggregation needed, as PY132 also includes pdica 
Directly identified in EU-SILC 
Further disaggregation needed, as PY132 also includes pdiss 
Directly identified in EU-SILC 
Directly identified in EU-SILC 

poacs 
poapu 

poaps 

poass 

poaab 

poadi 

poawr 
byr 

PY104 
PY102 

PY102 

PY102 

PY100 

PY102 

PY103 
PY100 

PY132 
PY131 
PY132 
PY133 
PY134 

Disability benefits 
pdiss 
pdi00 
pdica 
pdiwr 
pdiot 
Sickness benefits 
bhl 
Unemployment benefits 

PY121 PY122  No disaggregation required 

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bunct 
bunnc 
bunot 
ysv 
buntr 
bunls 

PY092 
PY093 
PY091 
PY092 
PY093 
PY090 

Family benefits 
bch00 

HY054 

bchot 

bched 

bmact 

bplct 

HY053 

HY053 

HY052 
HY054 
HY053 

& 

bcham 

HY054 

bfaot 

HY054 

Social assistance 
bsaoa 

HY063 

bsa00 

bsaot 

bsa01 
bsapu 

HY063 

HY063 

HY061 
HY060 

Housing benefits 
bho00 

HY073 

bhoot 

HY073 

Further disaggregation needed, as PY092 also includes ysv 
Further disaggregation needed, as PY093 also includes buntr 
Directly identified in EU-SILC 
Further disaggregation needed, as PY092 also includes bunct 
Further disaggregation needed, as PY093 also includes bunnc 
Variable  not  disaggregated  in  EU-SILC;  identified  as  the 
residual not contained in PY091-PY094 

Further disaggregation needed, as HY054 also includes bfaot, 
bmact and bcham 
Further disaggregation needed, as HY053 also includes bplct 
and bched 
Further disaggregation needed, as HY053 also includes bchot 
and bplct 
Further  disaggregation  needed,  as  HY054  also  includes 
bch00, bfaot and bcham 
Further disaggregation needed, as HY053 also includes bchot 
and bched 
Further  disaggregation  needed,  as  HY054  also  includes 
bch00, bmact and bfaot 
Further  disaggregation  needed,  as  HY054  also  includes 
bch00, bmact and bcham 

Further disaggregation needed, as HY063 also includes other 
social assistance benefits 
Further disaggregation needed, as HY063 also includes other 
social assistance benefits 
Further disaggregation needed, as HY063 also includes other 
social assistance benefits 
Directly identified in EU-SILC 
Variable  not  disaggregated  in  EU-SILC;  identified  as  the 
residual not contained in HY061-HY064 

Further  disaggregation  needed,  as  HY073  also  includes 
bhoot. 
Further  disaggregation  needed,  as  HY073  also  includes 
bho00. 

For those variables requiring further disaggregation, information on the actual policies have been 
used.  Generally,  the  procedure  was  to  infer  eligibility  and  benefit  amounts  from  observed 
information  on  individual/household  characteristics,  current  activity,  and  receipt  of  aggregate 
benefits.  Eligibility  and  amounts  have  to  be  assigned,  while  only  receipt  and  amount  of  the 
broader  aggregate  benefits  is  known.  This  has  generally  been  done  with the  help  of  observed 
information on individual characteristics (like age, gender, marital status, and health status), on 
current  activity  (months  spent  in  retirement,  work,  unemployment,  and  education),  on 
employment (employment status, industry, weekly hours worked, search activity, employment 
income), on household characteristics (household composition, presence and number of children), 
on benefit receipt for aggregate benefits, on benefit regulations (eligibility, rates, and maximum 
and minimum amounts), and on the little that is known on work history (months ever in work). 

However, in many cases, this observed information was not sufficient to determine eligibility and 
amounts perfectly. In these cases, we generally proceeded following two approaches, often in a 

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combination  of  the  two:  1)  assigning  aggregate  benefits  to  exactly  one  of  the  disaggregated 
benefits, in case this was possible, assuming only one of the aggregate benefits is received at a 
time. However, this assumption can well be violated so that some error is inevitable with  this 
approach. But often this was the only possible approach when benefits depend on (unobserved) 
contributions.  2)  Where  possible,  eligibility  and  amounts  of  disaggregated  benefits  have  been 
determined  directly,  i.e.  by  inferring  from  observed  information,  or  say  imputing  the  benefit. 
These  approaches  shall  be  clarified  in  the  following  when  disaggregation  procedures  are 
described in detail for the single aggregate benefit categories. 

For income from employment (yem), there has been no need to disaggregate because none of the 
single  components  has  been  simulated.  Income  from  employment  consists  of  the  single 
components: wages and salary from main and second jobs, severance pay from last job, 13th and 
14th month wages, Christmas bonuses, holiday payments, profit sharing, other special incomes, 
bonuses to cover work-related travel expenses related to public transport, and military or civil 
service payments. 

Similarly,  there  has  been  no  need  for  disaggregation  at  income  from  rent  (ypr),  which  only 
consists of income from rental of a property or land, and at income from capital (yiy), which only 
consists of income from interest, dividends, or profit from capital investments in unincorporated 
business.  This  means  that  these  incomes  have  been  treated  as  compound  incomes  in  the 
simulations. This is relevant for income from rent at personal income taxation (policies tin_de, 
tinit_de, tinjt_de), where it has been assumed that this income is entirely taxable under income 
from  rent.  Similarly,  income  from  capital  has  been assumed  at  income  taxation  to  be  entirely 
taxable, apart from any allowances for capital income, where applicable. 

Unemployment benefits (EUROMOD variable bun) have been disaggregated into six components 
by the following procedure. 

-  Firstly, the observed benefit amount in the SILC variable PY093 is assigned to “citizen’s 
benefit (ALG II)” (EUROMOD variable bunnc), up to the maximum legislated amount 
in  2016.  Any  amount  above  the  maximum  is  assigned  to  “benefits  for  re-training” 
(EUROMOD variable buntr).   

-  Secondly,  the  observed  benefit  amount  in  the  SILC  variable  PY092  is  assigned  to 
“unemployment  benefits  I  (ALG  I)”  (EUROMOD  variable  bunct)  as  long  as  the 
respective  individual  reports  to  have  spent  at  least  a  month  in  unemployment.  The 
observed benefit in PY092 is assigned to “severance payments” (EUROMOD variable 
ysv)  if  the  individual  reporting  non-zero  amount  in  PY092  reports  to  have  spent  zero 
months in unemployment. 

-  Thirdly, the observed benefit amount in the SILC variable PY091 is assigned to “benefits 

for business start-ups” (EUROMOD variable bunot). 

-  Fourthly, the difference between i) all unemployment benefits reported in SILC variable 
PY090 (EUROMOD variable bun) and ii) the imputed unemployment benefits (bunnc, 
bunot, bunct, buntr, ysv) is assigned to “lump-sum unemployment benefits” (EUROMOD 
variable bunls). 

Old-age pensions (EUROMOD variable poa) have been disaggregated into eight components by 
the following procedure: 

-  Firstly,  the  benefit  amount  reported  in  SILC  variable  PY104  is  assigned  to  “old-age 

pensions for civil servants” (EUROMOD variable poacs).   

-  Secondly,  the  benefit  amount  reported  in  the  SILC  variable  PY103  is  assigned  to 

“benefits for war victims” (EUROMOD variable poawr). 

-  Thirdly, the benefit amount reported in the SILC variable PY102 is disaggregated into 
several benefits: The benefit amount is assigned to “Disability pensions for those aged 
over 65, that include the Disability pension from stat. accident insurance” (EUROMOD 

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variable  poadi) if  the respective individual  reports  to have  a  disability  and a  non-zero 
amount  in  the  SILC  variable  PY101.  The  amount  reported  in  PY102  is  assigned  to 
“Pensions for employees in public service” (EUROMOD variable poapu) if poadi is zero 
for  the  respective  individual  and  they  report  non-zero  amount  in  the  SILC  variable 
PY104. The amount in PY102 is then assigned to “pensions for self-employed, farmers 
and freelancers” (EUROMOD variable poaps) if the individual has zero amount in poadi 
and poapu and fulfils one of the conditions: i) the individual reports to be a farmer, ii) the 
individual reports to be self-employed but not a farmer, iii) the individual reports non-
zero amount in the SILC variable HY061.  

-  Fourthly, we calculate the difference between i) PY102 and ii) the sum of poadi, poapu 
and  poaps.  The  sum  of  this  difference  and  the  amount  reported  in  the  SILC  variable 
PY101  are  assigned  to  “Old-age  pensions  from  the  statutory  pension  insurance” 
(EUROMOD variable poass), up to the maximum legislated amount in 2016. The amount 
above  the  maximum  is  then  assigned  to  “Old-age  pensions  from  employer  schemes” 
(EUROMOD variable poa00). 

-  Finally, the difference between i) all old-age benefits reported in SILC variable PY100 
(EUROMOD  variable  poa)  and  ii)  the  sum  of  old-age  benefits  in  the  SILC  variables 
PY101, PY102, PY103 and PY104, is assigned to two benefits: 1) “old-age pensions from 
a foreign country” (EUROMOD variable poaab) if the individual is older than 65 and 2) 
“benefits for early retirement” (EUROMOD variable byr) if the individual is aged 65 or 
less.  

Survivor pensions (EUROMOD variable psu) have been disaggregated into two components in 
the following way: 

-  The amount reported in the SILC variable PY110 (EUROMOD variable psu) are assigned 
to “orphaner’s pension” (EUROMOD variable psuor) if the person is aged 18 or younger 
or aged 19 to 27 and not widowed. 

-  Remaining benefit amount is assigned to “widow(er)’s pension” (EUROMOD variable 

psuwd). 

Disability benefits (EUROMOD variable pdi) have been disaggregated into five components by 
the following procedure: 

-  Firstly, the benefit amount reported in the SILC variable PY131 is assigned to “pensions 

for reduced ability to work” (EUROMOD variable pdi00). 

-  Second, the benefit amount reported in the SILC variable PY133 is assigned to “Benefits 

for war victims and burden sharing” (EUROMOD variable pdiwr). 

-  Third, the benefit amount reported in the SILC variable PY134 is assigned to “Pensions 

for disability to work for civil servants” (EUROMOD variable pdiot). 

-  Fourth, the benefit amount reported in the SILC variable PY132 is split into two benefits: 
1) “Long-term care benefits from pension insurance” (EUROMOD variable pdica) up to 
the maximum legislated amount in 2016; 2) the difference between PY132 and pdica is 
assigned to "Disability pension from statutory accident insurance" (EUROMOD variable 
pdiss). 

Family benefits (EUROMOD variable bfa): 

-  First,  “maternity  benefits”  (EUROMOD  variable  bmact)  are  directly  identified  from 

SILC variable HY052. 

-  Then, we proceed to disaggregate SILC variable HY054. To this end, we first impute the 
month of birth of children aged 0 by checking if the amount recorded in SILC variable 
HY054  coincides  with  child  benefits  being  paid  for  a  certain  number  of  months.  The 
result of this check indicates the month of birth of most children aged 0. This information 

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is  useful  for  the  disaggregation  of  most  family  benefits  reported  by  households  with 
children aged 0. 

-  Thirdly, “child benefits” (EUROMOD variable bch00) are identified from SILC variable 
HY054  (for  those  aged  0,  taking  into  account  the  imputed  month  of  birth),  as  child 
benefits are an (almost) universal benefit. 

-  Fourth, the second component of “maternity benefits” (EUROMOD variable bmact) is 
identified from what remains from SILC variable HY054 for households with children 
aged 0.  

-  Then, we simulate eligibility criteria for the receipt of “alimony payments” (EUROMOD 

variable bcham) and identify them from the remainder of SILC variable HY054.  

-  Any remaining amount in SILC variable HY054, which has not been allocated to any of 
the  three  benefits  above,  is  assigned  to  “family  benefits:  other:  care  allowance” 
(EUROMOD variable bfaot). 

-  Next, we proceed to disaggregate SILC variable HY053. For families with children aged 
0 and/or 1, which do not report receipt of housing benefits or social assistance benefits, 
we  classify  any  amount  reported  in  SILC  variable  HY053  as  parental  benefits 
(EUROMOD variable bplct). For those families with children aged 0 or 1, who report 
receipt  of  housing  benefits,  we assign  them  the  minimum  amount  of  parental  benefits 
from  SILC  variable  HY053  and  the  rest  is  allocated  to  “additional  child  benefits” 
(EUROMOD variable bchot).  

-  Then, we simulate  the maximum possible  additional child benefits for families whose 
children are aged 2 and older and assign any remaining amount  in variable HY053  to 
“additional child benefits”, as long as this does not exceed the simulated amount. 

-  Next,  we  identify  “children  benefits:  educational  allowance”  (EUROMOD  variable 
bched) as the remainder of SILC variable HY053 for those families reporting receipt of 
unemployment benefits II, housing benefits or social assistance.  

-  Finally, adjustments to make ends meet are made on “parental benefits”.  

Social  assistance  benefits  (EUROMOD  variable  bsa)  have  been  disaggregated  into  five 
components by the following procedure: 

-  Firstly, the amount reported in SILC variable HY061 is identified as “social assistance: 

pension for agriculture” (EUROMOD variable bsa01). 

-  Secondly, “social assistance: charities” (EUROMOD variable bsapu) is identified as the 
observed amounts listed in SILC  variable HY060 which are not listed in any of these 
SILC variables (HY061, HY062, HY063, HY064). 

-  Thirdly, the amount reported in SILC variable HY063 is split into three social assistance 
benefits, namely EUROMOD variables bsaoa, bsaot and bsa00. In order to do so, SILC 
variable HY063 is identified as “social assistance: old-age” (EUROMOD variable bsaoa) 
if households reporting positive values include members aged 65 or older and/or members 
with disabilities. Then, remaining amounts of HY063 are allocated to “social assistance: 
social  benefits”  (EUROMOD  variable  bsaot)  if  there  are  children  living  in  the 
households. Finally, any remaining positive value of HY063 is allocated to “basic social 
assistance” (EUROMOD variable bsa00). 

Housing benefits (EUROMOD variable bho) have been disaggregated into two components in 
the following way: 

-  Firstly, the benefit amount reported in the SILC variable HY073 is assigned to “other 
housing  benefits”  (EUROMOD  variable  bhoot)  for  all  households  who  report  being 
recipients of unemployment assistance or social assistance. 

-  The remaining benefit amount reported in SILC  variable HY073 is assigned to “basic 

housing benefits” (EUROMOD variable bho00). 

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Survivor  benefits  (EUROMOD  variable  psu)  have  been  disaggregated  into  two  components, 
namely “survivor benefits: widows” (psuwd) and “survivor benefits: orphans” (psuor). 

3.3.4  Approximation of Benefit Entitlement Basis 

The benefit entitlement basis is essential for simulations of benefit receipt and amounts in the 
framework of EUROMOD. For most of the contributory benefits that have been simulated, the 
benefit  entitlement  basis  is  some  past,  usually  pre-spell  income,  often  the  after-social-
contributions income from employment. The problem for the simulations is that past income from 
employment  is  not  observed.  But  this  information  can  be  inferred  from  benefit  receipt  under 
certain conditions. An attempt in this direction has been made in order to be able to simulate any 
contributory benefits at all. 

For contributory benefits, the benefit function can be inverted to infer the entitlement basis if all 
parameters of the function, except for the entitlement basis, are known. This does not hold for 
most pensions, as for pensions both the income level, on which contributions have been made, 
and the duration of contributions are unknown. As a consequence, this procedure has not been 
applied to any old-age pensions. However, for most other contributory benefits, the duration of 
contributions is not so important, and only the income level needs to be approximated. In this 
case, inversion of the benefit function yields a proxy for the necessary information. 

This  procedure  can,  of  course,  only  be  applied  for  individuals  for  whom  a  spell  is  observed, 
because otherwise benefit receipt is unobserved, so that the benefit amount is also unknown, and 
thus more than one parameter of the benefit function is unknown. However, as for most of the 
contributory benefits that have been simulated the entitlement basis is very similar (pre-spell after-
social-contributions income from employment), an average of all approximated bases, over all 
contributory benefits, can be generated, and thereby a proxy for the entitlement basis results, also 
for individuals who are not in receipt of a specific contributory benefit, if they are in receipt of 
any simulated contributory benefit. 

Contributory benefits that contribute to the generation of this proxy are: unemployment benefits 
I,  sickness  benefits  from  statutory  health  insurance,  sickness  benefits  from  private  health 
insurance, long-term care benefits from statutory accident insurance, parental-leave benefits, and 
disability pensions from statutory accident insurance. 

For unemployment benefits I, the number of months benefits were received has been considered. 
The benefit function has been differentiated by individuals with kids and without kids, and by 
individuals earning additional income from employment. For the latter group, it has also been 
considered that they are only allowed to earn additional income up to a threshold. The relevant 
income for this threshold considers taxes and social security contributions paid, as well as a lump-
sum allowance for earnings-related expenses. 

For  sickness  benefits  from  statutory  health  insurance,  sickness  benefits  from  private  health 
insurance, long-term care benefits from statutory accident insurance, parental-leave benefits, and 
disability  pensions  from  statutory  accident  insurance,  the  benefit  function  has  been  simply 
inverted, conditional on benefit receipt. 

An average over all approximated benefit bases has been generated, at the individual level. For 
those individuals who report “employee”, but for whom the proxy evaluates to zero because they 
are not in receipt of any of the contributory benefits, current earnings, deflated from 2018 to 2017 
(for  the  input  dataset  based  on  EU-SILC  2018)  by  the  growth  rate  of  employee  income  from 
national accounts, have been applied. This has also been done for individuals with a zero proxy 
who do not report “employee”, but who earn positive income from employment. For those with 

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zeros  who  do  not  report  “employee”  and  who  earn  zero  income  from  employment,  estimated 
wages (yivwg) and current hours (lhw) have been applied.  

3.3.5 

Imputation of Tax Deductions/Allowances 

From EUROMOD release H2.0+ onwards, tax deductions and allowances have no longer been 
imputed but simulated within the income tax policy (see Section  2.8.1 of this report). For the 
documentation of these old imputations, please refer to older versions of the EUROMOD Country 
Report for Germany.15 

3.3.6  Other Imputed Variables 

Housing  expenditures  (EUROMOD  variable  xhcrt)  have  no  longer  been  imputed  from 
EUROMOD version H2.0+ onwards (i.e. the original EU-SILC values of xhcrt are used). 

Holdings of financial assets (EUROMOD variable afc) have been imputed, inferring them from 
the observed income from capital (yiy). It has been assumed that income from capital has been 
received as an average rate of return on the stock of financial assets. As a proxy for this rate of 
return, an average interest rate has been applied. This is the annual average of monthly rates for 
the year 2019 (EU-SILC 2020) of the interest rate on deposits for households, with maturity of 1-
2  years.16  It  evaluates  to  0.29%  in  2019.  Inverting  the  rate  of  return  function,  applying  the 
calibration for the rate, returns the stock of financial assets, on average for the year 2019. 

Regional information on residence is missing in the German EMSD (DB040). There has been no 
possibility  to  apply  any  other  information  that  was  helpful  to  impute  the  missing  regional 
information. As a result, no imputation for the regional information has been implemented. 

3.4  Updating 

To account for any time inconsistencies between the input dataset and the policy year, updating 
factors are used. Each monetary variable (i.e. each income component) is updated so as to account 
for changes in the non-simulated variables that have taken place between the year of the data and 
the year of the simulated tax-benefit system. Updating factors are generally based on changes in 
the average value of an income component between the year of the data and the policy year. For 
detailed information about the construction of each updating factor as well as the sources that 
have been used, see Annex I. 

As a rule, updating factors are provided both for simulated and non-simulated income 
components present in the input dataset. Note however that in the case of simulated variables, 
the actual simulated amounts are used in the baseline rather than the uprated original variables 
in the dataset. Updating factors for simulated variables are provided so as to facilitate the use of 
the model in cases when the user wishes to turn off the simulation of a particular variable. The 
list of uprating factors as well as the sources used to derive them can be found in Table 3.5 in 
Annex I below. 

To 

access 

15 
https://www.euromod.ac.uk/using-euromod/country-reports  
16 See ECB, MFI interest rates: http://sdw.ecb.europa.eu/browse.do?node=2018774. 

EUROMOD  Country  Reports, 

previous 

versions 

of 

see 

here: 

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3.5  Extended input data (with household expenditures for the simulation of consumption 

taxes)  

For the simulation of consumption taxes, the model needs to be run with extended EUROMOD 
input files. They consist of the core EUROMOD input files based on EU-SILC or National SILC, 
extended with new variables (household-level income shares of expenditures by product) imputed 
from EU/National-HBS. The semi-parametric method implemented for the imputation follows 
the methodology developed by Akoğuz et al (2020). 

Table 3.2 summarizes the major features of the most recent database used to be run with the policy 
systems of 2021-2024.  

Table 3.2 Extended EUROMOD database description 

Extended  EUROMOD  database  for  the 
simulation of consumption taxes 
EUROMOD database 
Year of collection (HBS) and source  
Year of collection (SILC) and source  
Coverage and sample size 
Share  of  households  with  negative 
incomes  excluded  from  the  matching 
procedure 

SILC  2022  –  Income  year  2021  –  Expenditures 
from HBS 2015 (COICOP 2003) 
DE_2022_b1_2015_03_e2 
HBS 2015 – EU 
SILC 2022 – EU 
32,906 households (65,893 individuals) 
0.1% 

These extended EUROMOD files contain all the variables included in the standard EUROMOD 
input files plus the income shares of each consumption category included in HBS. For example, 
for countries with consumption disaggregation at 4 COICOP level (5 digits), there will be close 
to 200 additional variables, each one with the income shares of expenditure (household level) for 
that particular consumption category (e.g. starting from the income share of rice consumption: 
xs01111; bread: xs01112, and so on and so forth). The number of additional variables depends on 
the granularity available in HBS, and it varies across countries).  

For  the  case  of  Germany,  data  DE_2022_b1_2015_03_e2,  the  number  of  variables  included 
(income shares of expenditures, xs_c*) are 122, corresponding to the harmonized consumption 
categories defined at COICOP [2003] level 4 (five digits).  

Please note that, due to the lack of information in the HBS files distributed by Eurostat, there is 
no consumption reported at 5-digit COICOP level for the following 3-digit codes: CP044, CP101, 
CP102,  CP103,  CP104.  Positive  consumption  might  exist  for  3-digit  or  4-digit  levels,  but 
EUROMOD uses only 5-digit values. 

This database is an extension of the core EUROMOD input database, and so it is based on the 
same  sample  (i.e.,  same  identifiers  "idperson"  and  "idhh"  to  identify  persons  and  households, 
respectively)  and  contains  the  same  variables  plus  the  income  shares  of  expenditure  (xs_* 
variables). 

In Table 3.3 we present the share of households' consumption expenditures by product (and total) 
captured in our matched databases (extended EM input files) with respect to the original reported 
expenditures  in  HBS.  The  column  that  refers  to  the  same  year  (in  this  case,  HBS  2015  with 
Extended EM Input 2015) directly depends on the quality of the imputation procedure, while the 
comparison across different years is influenced not only by the matching noise but also by the 

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changes in population characteristics and in the underlining distribution of income. Therefore, the 
coverage displayed in the second column is just informative but is not and should not be used to 
evaluate nor validate the imputation procedure. 

Information on the coverage of these simulated expenditures (coming from the imputation of HBS 
2015  to  more  recent  SILC-based  data)  with  respect  to  the  expenditures  reported  by  National 
Accounts is included in section 4 of this report, together with the other macro-validation results.  

Below we summarize the main findings from the imputation validation checks for Germany.  

Table 3.3. Expenditure coverage of Extended EM Input files  
COICOP group 

1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 

HBS  2015  –  Extended  EM  Input 
2015 
106.8 
108.0 
104.8 
103.6 
97.8 
132.0 
107.5 
106.4 
95.8 
52.5 
117.9 
103.8 

HBS 2015 – Extended EM Input 
2022 
112.8 
115.3 
102.4 
94.8 
95.7 
108.5 
112.1 
116.4 
110.6 
27.6 
106.3 
137.8 

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4.  VALIDATION OF INPUT DATASET BASED ON EU-SILC 2022 

4.1  Aggregate Validation 

EUROMOD  results  are  validated  against  external  benchmarks.  Detailed  comparisons  of  the 
number of people receiving a given income component and total yearly amounts are shown in the 
Annex. Both market incomes and non-simulated taxes and benefits in the input dataset as well as 
simulated taxes and benefits are validated against external official data. The main discrepancies 
between EUROMOD results and external benchmarks are discussed in the following subsections. 
Factors that may explain the observed differences are also discussed. 

4.1.1  Components of disposable income 

There are no major differences between the definitions of disposable income in EUROMOD and 
in the EU-SILC data (see  

Table 4.1). Almost all income components listed in  

Table 4.1 are included in both income concepts. However, there are some exceptions. Disposable 
income in EUROMOD does not include fringe benefits (kfb), such as for example company cars, 
while the EU-SILC concept does include them. In addition, one off-payments in the context of 
the energy crisis in 2022 have been added to the 2022 and, if applicable, 2023 policy year. They 
cannot be part of disposable income for the latest SILC wave with income reference year 2021, 
with exception of the child bonus in 2021, whose simulation was switched off in 2021. 

Note moreover that some variables listed for the EUROMOD concept in  

Table 4.1 are aggregate variables. That means they have been harmonized for the UDB micro 
data set and have been disaggregated again by the national team in the context of the EUROMOD 
simulations (also see Section 3.3.3 for more details). As a consequence, they consist of several 
income components, some of which have been simulated in EUROMOD and some not. These 
variables  are  income  from  private  pension  plans  (il_ppen),  old-age  pensions  (poa),  disability 
pensions (pdi), unemployment benefits (bun), family benefits (bfa) and social assistance (bsa). 

In  

Table 4.1, these variables are only listed in its aggregate form and the single income components 
are left out.  Income taxes and social security contributions are only observed as a total in EU-

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SILC (variable HY140G). In EUROMOD, however, income taxes are simulated for income in 
general (tin) and income from capital (tinkt). Social security contributions are also simulated and 
broken down by social status, yielding separate simulated figures of social security contributions 
for employees (ils_sicee), for self-employed individuals (ils_sicse) and for pensioners (ils_sicpe). 
Repayments/receipts for tax adjustments (HY145N) as well as regular taxes on wealth (tpr) are 
observed in EU-SILC, while they have not been simulated in EUROMOD. 

The composition of disposable household income in EUROMOD does change over the policy 
years 2021 to 2024. In 2022 the energy related one-off payments have been included to provide 
a more realistic picture of disposable income for the year 2022. In 2023, only the one-off payment 
for students and the second heating bonus are included.  

Table 4.1 Components of disposable income 

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EUROMOD 
[2021-2024] 
ils_dispy 
+ 
+ 
n/a 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
n/a 
+ 

German EU-SILC 2022 
[income year 2021] 
HY020 
+ 
n/a 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
+ 
- 
n/a 

 Employee cash or near cash income 
 Employer's social insurance contribution 
Company car 
 Contributions to individual private pension plans  
 Cash benefits or losses from self-employment  
 Pension from individual private plans  
 Unemployment benefits 
 Old-age benefits 
 Survivor’ benefits 
 Sickness benefits 
 Disability benefits  
 Education-related allowances  
 Income from rental of a property or land  
 Family/children related allowances 
 Social exclusion not elsewhere classified 
 Housing allowances  
 Regular inter-household cash transfer received 
 Interests, dividends, etc. 
 Income received by people aged under 16 
 Regular taxes on wealth 
Energy-related lump sum transfer (employer, 
pensioners, students) 
Heating bonus 
Child bonus 
 Regular inter-household cash transfer paid  
 Tax on income and social contributions  
 Repayments/receipts for tax adjustment  
Contributions to private health insurance [self-
employed] 
Notes:  Some  variables  in  EUROMOD  (namely  poa,  pdi,  bun,  bfa,  bsa,  bho)  are  aggregated 
variables.  They  consist  of  several  components,  some  of  which  have  been  simulated  in 
EUROMOD and some not. 
Source: For EU-SILC, Eurostat (2022) – EU-SILC 065 (2022 operation) – Description of Target 
Variables: Cross-sectional and longitudinal, 2022 operation v4. 

+ 
+ 
- 
- 
n/a 
- 

n/a 
+ 
- 
- 
- 
n/a 

4.1.2  Validation of market income 

The components of market income in EU-SILC data shall be validated with respect to the number 
of recipients as well as the aggregated total incomes received in the population in a year. Table 
A3.1 in the Annex tabulates the number of recipients for each component of market income, as it 
has been defined in EU-SILC for 2021 and compares it to figures from external statistics. As all 
the  components  of  market  income  have  not  been  simulated  in  EUROMOD,  the  number  of 
recipients remains constant throughout all simulated years. Thus, the number of recipients for the 
input database is only displayed for 2020 in Table A3.1. 

The sum of all components of market income, minus expenditures for alimony payments (xmp) 
and expense for private health insurance (xhi_s) is defined to be “original (market) income” in 
EUROMOD, from which the largest part comes from income from employment. The number of 
individuals  receiving  positive  income  from  employment  (yem)  in  2020  is  lower  in  EU-SILC 

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(39.694 Mil.) than in external figures from the National Accounts (40.763 Mil.). Unfortunately, 
both figures are only partially comparable, as EU-SILC reports all individuals who have received 
income from employment whereas the  National Accounts reports a  yearly average. Therefore, 
one  can  conclude  that  EU-SILC  possibly  represents  an  accurate  number  of  individuals  with 
positive  income  from  dependent  employment.  For  income  from  self-employment  (yse),  the 
number of recipients in EU-SILC fits well to the external statistics. 

The respective aggregate amounts for the components of market income are displayed in Table 
A3.2. The figures for the aggregate amount for dependent employment income (yem) sums up to 
1,630bn Euro in 2021. This figure matches quite well the corresponding number from external 
sources  (1,616bn),  which  in  this  case  are  National  Accounts.  The  ratio  for  this  variable  also 
remains quite close to one for the years it has been uprated.  

Unfortunately, it is not possible to validate the aggregate income from self-employment (yse), 
since  national  accounts  report  income  from  self-employment  as  well  as  capital-  and  property 
income jointly. 

4.1.3  Validation of taxes and social insurance contributions 

In this section, results from EUROMOD of taxes and social insurance contributions are presented 
and validated in terms of numbers of recipients and aggregated amounts against external data. 
Apart from the property tax (tpr), all taxes and social insurance contributions have been simulated. 

Table A3.3 displays the numbers of taxpayers and contributors as simulated. No external data on 
the number of contributors for the years 2021 to 2024 could be found, except for social security 
contributions  paid  by  employees  (ils_sicee),  where  EUROMOD  slightly  overestimates  the 
number of contributors with a ratio ranging 102 % to 105 %. In the EU-SILC data for 2021, about 
48m households pay regular income taxes (tin). Although not having any data for 2021 this figure 
is about 5m higher compared to the latest available data from 2020.  

Aggregate amounts of simulated taxes and social security contributions are compared to external 
figures in Table A3.4. External information from national accounts has been utilised to validate 
the  simulated  social  security  payments.  Employees’  social  contributions  have  been  over-
simulated with increasing accuracy over the years, which mainly stems from an over-estimation 
of health insurance contributions. Employer’s social security contributions have been simulated 
more  accurately  (ratio  of  105%)  with  unemployment  insurance  contributions  being  the  most 
precise branch. Social contributions made by self-employed individuals are substantially over-
estimated  despite  of  the  relatively  accurate  number  of  individuals  receiving  self-employment 
income  which is  probably  due to the  simplified  simulation  of contributions  by  self-employed, 
especially for statutory pension insurance contributions. 

There is less information available for taxes17 especially in the manner that the revenue simulated 
by EUROMOD can be compared to official statistics. The external cash-based figures comprise 
the payroll tax on wages, the assessed income tax as well as the respective solidarity surcharge 
on those taxes, which is consistent to the EUROMOD simulation. For 2021, the revenue from 
income tax (tin_s) simulated by EUROMOD is nearly equivalent to the external statistics with an 
accuracy of 101 %.  

4.1.4  Validation of Benefits 

The  macro  validation  of  simulated  benefits  is  divided  into  pension benefits,  means-tested  and 
non-means-tested  benefits.  We  compare  simulated  as  well  as  non-simulated  benefits,  whose 

17 For details on the imputation of tax allowances, please see section 3.3.5. 

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values have been taken directly from the input data. It is important to note that many of the non-
simulated variables are the result of the disaggregation carried out by the national team (for more 
methodological  details,  see  Section  3.3.3).  It  should  be  therefore  further  noted,  that  any 
discrepancies in the number of recipients/aggregate spending estimated with EUROMOD (i.e. 
EU-SILC) vs based on official statistics can be attributed to both measurement error in the EU-
SILC  data  as  well as  measurement  error in  the  benefit  disaggregation  method. The  respective 
numbers of recipients are displayed in Table A3.5.   

From the pension benefits only the disability pension from statutory accident insurance has been 
simulated, unfortunately with low accuracy. The number of recipients of the most relevant type 
of pension, the old-age pension from statutory pension insurance (poass), from EU-SILC does 
not  match  the  external  data  very  precise  with  accuracy  below  90  %,  similar  to  pensions  for 
individuals with reduced ability to work (pdi00). In contrast, the number of recipients of civil 
servants’ pensions (poacs) from external data corresponds more or less those from EU-SILC. 

Among the  means-tested benefits, only  minor ones have not been simulated, and for those no 
external sources could be found. The number of recipients of the other means-tested benefits has 
been validated against external sources, mostly with data from the Federal Employment Agency 
or from the National Statistical Office. The most relevant means-tested benefit, citizen’s benefit 
(bunnc) has been over-estimated with respect to the number of its recipients in all years (ratio 
between 124 % and 144%). The number of recipients of housing benefits (bho00) or additional 
child benefits (bchot) have been extensively over-simulated. These benefits typically suffer from 
substantial non-take up in reality. For all these benefits benefit take-up adjustments are available. 
This is of special interest for the policy year 2023 as eligibility of housing benefits have been 
significantly  widened.  Another  important  means-tested  benefit,  old-age  social  assistance 
(bsaoa_s), has a lower number of recipients in EUROMOD than in external sources (ratio of 84% 
in  2021).  It  is  important  to  note  that  the  numbers  of  these  benefits  represent  households  not 
individuals as in the case of all other benefits and taxes. In addition to these benefits, recipients 
of education benefits (bed) have been heavily over-simulated.  

Turning to the non-means tested benefits, only about half of them are simulated. For the most 
important  benefit,  child  benefits  (bch00),  the  simulated  number  of  recipients  is  only  slightly 
under-estimated (ratio of 94% in 2021), while simulated recipients of unemployment benefits are 
much less than the simulation suggest (ratio of 76% in 2021). The third simulated non-means-
tested benefit, for which external data is available, is the parental leave benefit (bplct), for which 
the number of the recipients is also under-estimated (ratio of 69% in 2021). In case of the non-
simulated non-means tested benefits, benefits for business start-ups (bunot) whereas benefits for 
retraining  (buntr)  appear  to  be  substantially  over-represented.  The  number  of  recipients  of 
severance payments in 2020 fits quite well the external, but for the following it is much higher, 
as short-time work compensation was mostly present during the first two years of the COVID19 
pandemic 2020 and 2021. 

Aggregate amounts for benefits are compared between EU-SILC and external sources in Table 
A3.6.  Euro  received  over  an  entire  year  by  the  whole  population  of  benefit  recipients  are 
displayed. There is a little bit more information available on total sums paid for these benefits in 
external  data,  compared  to  the  number  of  recipients.  Often  official  statistics  report  aggregate 
amounts paid for particular benefits (e.g. in the official budget), but they do not state the number 
of individuals or households receiving it. 

Most pension components appear to be under-represented in the input dataset with the exception 
of old-age benefits from the statutory pension insurance (poass), by far the largest old-age benefit, 
which is slightly over-estimated (ratio between 105 % and 107 %). Amounts from civil servant 
pensions (poacs) match the external statistics even better. Larger discrepancies can be found in 
pensions for reduced work ability (poapu) and pensions from employer schemes (poa00) that are 

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likely to be driven by the disaggregation of pension benefits which are carried out by the national 
team. Unfortunately, the five types of pensions poass, poa00, poaps, poapu and poaab have been 
disaggregated  from  a  single  EU-SILC  variable.  Therefore,  it  is  difficult  to  achieve  better 
disaggregation results without further information on labour market biographies. The aggregate 
amount of the major simulated disability benefit from the statutory accident insurance (pdiss_s) 
cannot  be  truly  validated  against  external  statistics  because  the  simulated  amount  concerns 
uniquely those below the age of 65 and there is no comparable external statistic that considers 
this age threshold. However, just as an indication that the simulation is reasonable, Table A3.6. 
includes the external figure corresponding to all disability benefits from the statutory accident 
insurance  and one  can  see  that,  as expected,  the  simulated  aggregated  amount is  substantially 
smaller than the official statistics, but the difference corresponds to the difference in recipients 
seen in Table A3.5. 

In contrast to the number of recipients, aggregate amounts for unemployment benefit II/citizen’s 
benefit are simulated quite precisely (ratio of 98 % in 2021). Other social assistance (bsaot_de), 
which is mainly the benefit payments to children of recipients of bunnc_de, matches also quite 
well to external statistics. With regards to the other components of minimum income schemes 
general  social  assistance  is  strongly  under-estimated  in  EUROMOD  compared  to  external 
sources.  Note  that  the  external  sources  comprise  benefits  for  refugees,  that  are  probably 
underrepresented in SILC. For the other important means-tested benefits, like education benefits, 
housing benefits and additional child benefits,  aggregate amounts are strongly over-estimated, 
probably due to non-take up issues. 

Concerning the most important non-means tested benefit in terms of aggregate spending, namely 
the child benefits (bch00), simulated amounts match sufficiently external official statistics (ratio 
of 84% for 2021). For the minor family benefits, sums deviate somewhat between simulations 
and external data. Maternity benefits (bmact_s) still appear to be quite precisely simulated (ratio 
of 96 % with respect to the external figure). However, aggregate sums of parental-leave benefits 
(bplct) are strongly under-simulated (ratio of 36 %). This has probably to do with the fact that the 
benefit  is  calculated  on  imputed  previous  earnings  of  the  recipients,  as  we  observe  these 
differences  for  most  contributory  benefits.  The  other  non-means  tested  benefits,  particularly 
unemployment benefits (bunct) and sickness benefits (bhl), but also for benefits for retraining 
(buntr) have been under-simulated. As in case of the numbers of recipients, the amounts for short-
time work schemes influence heavily the numbers of severance payments (ysv).  

4.2 

Income distribution  

All  income  distribution  results  presented  here  are  computed  for  individuals according  to their 
household disposable income (HDI) equivalised by the “modified OECD” equivalence scale. HDI 
are calculated as the sum of all income sources of all household members net of income tax and 
social security contributions. The weights in the OECD scale are: first adult=1; additional people 
aged 14+ =0.5; additional people aged under 14=0.3. 

4.2.1 

Income inequality 

The distribution of equivalised disposable household income is presented in Table  A3.7 in the 
Annex as income shares hold by income deciles. Simulated incomes for the  four policy years 
(EUROMOD)  are  compared  to  external  data,  for  which  ratios  of  coverage  are  tabulated.  The 
external source for the decile income shares is Eurostat statistics.  

EUROMOD over-simulates the income share of the lowest decile in 2020, where the ratio of the 
simulated  to  the  external  figure  amounts  to  121%.  For  the  second  to  ninth  decile  of  the 
distribution, with ratios of 99% to 102%, EUROMOD captures the coverage of the population 

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very accurately. The top decile is slightly underestimated with a base / external ratio of 95%. The 
reason for the high ratio in the first decile could be the over simulation of citizen’s benefits, the 
most relevant benefit for low-income households. For 2021, no over-simulation of the income 
share of the first decile is found.  

For the comparisons of the median, mean, Gini coefficient, and the inter-quantile ratio (S80/S20), 
external data  again refers to official statistics from  Eurostat. In terms of household disposable 
income,  the  median  is  closer  to  or  exactly  one  than  the  mean  (99%  vs  96%  in  2021).  Gini 
coefficient and the inter-quantile ratio match nearly perfectly to the external data in 2021 and are 
only slightly lower in 2022. 

4.2.2  Poverty rates 

Poverty  rates  by  gender  and  age  are  presented  in  Table  A3.8.  They  are  compared  for  the 
EUROMOD simulations with external data from  Eurostat statistics. Their computation for the 
simulated data is based on the equivalised disposable household income that has already been 
analysed for its distribution in the previous section. Several definitions of poverty rates have been 
applied, always with respect to a share (40%, 50%, 60% or 70%) of the median income in the 
population. Poverty rates are differentiated by gender, and for the usual 60%-definitions they are 
presented separately for age groups. Results for 2021 show that all poverty rates are rather well 
simulated compared to the external figures from Eurostat except for the 40% poverty threshold, 
where  the  share  is  substantially  underestimated,  possibly  due  to  the  over-simulation  of  some 
means-tested benefits. In 2022 all poverty rates are overestimated ranging from 103 % to 120 %, 
except for the 40% threshold, whose share is still undersimulated. 

4.3  Macrovalidation of consumption taxes 

Table A3.9 and A3.10 show the validation of the consumption taxes-related amounts. The top 
part of table A3.9 compares aggregated expenditure amounts from EUROMOD simulations with 
National Account (NA) external statistics as reported by EUROSTAT. For many COICOP level 
1 categories, aggregated simulated values are relatively close to the external statistics (with ratios 
between 0.7 and 1.2). The notable exceptions are “02 Alcoholic beverages, tobacco, etc.” (ratio 
0.44), “05 Furnishings, household equipment, etc.” (ratio 0.55), and especially “10 Education”, 
where  less  than  one  fourth  of  expenditures  are  captured  by  EUROMOD  as  compared  to  the 
external statistics. 

The  comparison  of  simulated  aggregated  revenues  (non-calibrated)  from  indirect  taxes  as 
compared  to  the  external  statistics  show  that  VAT  is  undersimulated  by  half,  while  60%  of 
revenues from excises are captured in simulations. The most underestimated excise categories are 
tobacco and electricity (ratios 0.37 and 0.36 respectively).  

These discrepancies might be related to the survey data. The consumption which is declared by 
households might differ from the actual one (e.g., misreporting of certain about how much they 
smoke and drink). Discrepancies might also occur due sampling (e.g., having sampled households 
who, on average, spend less on furnishing or household equipment as compared to the aggregate 
statistics).  

To correct for this problem, EUROMOD provides also adjusted consumption aggregates, where 
the  calibration/correcting  factor  is  the  ratio  between  NA  aggregated  expenditures  and  EM 
aggregated simulated expenditures level 1 at baseline. Effectively NA adjustment scales-up (or 
down) consumption and tax liabilities of all individuals.  

Table  A3.10  compares  annual  Government  revenue  from  consumption  taxes  after  applying 
calibration  to  NA.  The  top  part  shows  total  simulated  consumption  tax  revenues  for  private 

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households  after  calibration.  After  calibration,  the  model  captures  around  60%  of  aggregate 
revenues from VAT and 80% from excises. Although the calibration improves the estimates for 
all categories (especially so for tobacco), excises from electricity are hardly changed showing a 
poor 0.37 ratio compared to the external statistics. 

Among  reasons  for  discrepancies,  the  most  likely  is  that  some  groups  which  pay  significant 
amounts  of  VAT  and  exercise  are  not  covered  in  HBS.  These  might  include  not  only  private 
household  not  covered  by  HBS,  but  also  the  government  and  the  third  sector,  hospitals  and 
business enterprises such as financial companies that are themselves exempt from VAT but have 
to pay the input VAT from all previous production.  

5.  SUMMARY OF “HEALTH WARNINGS” 

The model draws to a large extent on the disaggregation of harmonized variables (mostly benefits) 
described in Section 3.3.3. The fit of the disaggregated benefits is very good for some variables 
and  rather  poor  for  others.    Fortunately,  for  input  datasets  based  on  EU-SILC  2016  and  later 
datasets, the national team has received information on which benefits are contained under which 
SILC  disaggregated  benefit  variables,  which  has  improved  the  quality  of  the  disaggregation 
procedure.  

From  this  release  onwards,  tax  allowances  are  no  longer  imputed  but  simulated  within 
EUROMOD. A detailed description of the simulation of tax allowances can be found in Section 
2.8.1  of  this  report.  A  description  of  the  (old)  imputed  tax  allowances  is  available  in  earlier 
versions of the Country Report for Germany. 

In  input  datasets  based  on  EU-SILC  2015  and  older,  early  retirement  benefit  (byr)  was 
disaggregated  from  unemployment  benefits  (bun).  Thanks  to  new  information  provided  by 
Eurostat,  the  early  retirement  benefit  (byr)  in  the  input  dataset  based  on  EU-SILC  2016  is 
identified as part of old-age benefits (poa).  

Furthermore, the policy pdiac_de - and resulting variables pdiac and pdiac_s - have been dropped 
in the model. According to new information provided by  Eurostat, EU-SILC does not contain 
information on this benefit. 

In input datasets based on EU-SILC releases up to 2015, advances on alimony payments were 
disaggregated  from  social assistance  benefits. Thanks  to  new  information,  we  know  that  such 
benefits are classified in EU-SILC as family benefits. As a consequence, the benefit bsaam takes 
the name bcham from input dataset DE_2015_a* onwards.  

In year 2020, the model includes the possibility of simulating Germany’s most important wage 
compensating scheme (Kurzarbeit). This policy already existed before 2020 and information on 
these transfers are saved in variable ysv. The simulated version of the policy in 2020 has been 
named bwkmcee_s for harmonisation purposes. 

The simulation of the wage compensation scheme (bwkmcee_de) is triggered by the simulation 
of labour market transitions defined in policy TransLMA_de. This policy becomes operational if 
the model is run in conjunction with the LMA add-on. The nature of these simulations is still 
experimental and only partially validated. Users are encouraged to refer to the “Simulating labour 
market transitions in EUROMOD” document prior to their use. 

Labour  market  transitions  are  switched  OFF  in  EUROMOD  baselines.  As  a  consequence, the 
simulation  of  monetary  compensation  schemes  does  not  produce  any  effect  in  baseline 
simulations. Since all policies not linked to labour market transitions are fully functional, it is 
possible for disposable income in 2020 to be higher than disposable income in previous years. 

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6.  REFERENCES 

Akoğuz, Elif Cansu, Bart Capéau, André Decoster, Liebrecht De Sadeleer, Duygu Güner, Kostas 
Manios, Alari Paulus, and Toon Vanheukelom (2020). A new indirect tax tool for EUROMOD: 
final  report.  Technical  Report.  https://euromod-web.jrc.ec.europa.eu/sites/default/files/2021-
03/A%20new%20indirect%20tax%20tool%20for%20EUROMOD%20Final%20Report.pdf  

Bundesagentur  für  Arbeit  (2018).  Strukturen  der  Grundsicherung  SGB  II,  Monats-  und 
Jahreszahlen ab 2005 

Bundesagentur  für  Arbeit  (2015).  Annual  report:  Labour  market  2014  (Arbeitsmarkt  2014) 
http://statistik.arbeitsagentur.de/Navigation/Statistik/Arbeitsmarktberichte/Jahresbericht-
Arbeitsmarkt-Deutschland-Nav.html. 

Bundesagentur  für  Arbeit  (2016).  Annual  report:  Labour  market  2015  (Arbeitsmarkt  2015) 
http://statistik.arbeitsagentur.de/Navigation/Statistik/Arbeitsmarktberichte/Jahresbericht-
Arbeitsmarkt-Deutschland-Nav.html. 

BMAS  (2013)  -  Bundesministerium  für  Arbeit  und  Soziales  (2013):  Sozialbericht  2013. 
http://www.bmas.de/SharedDocs/Downloads/DE/PDF-Publikationen/sozialbericht-2013.pdf 

BMAS  (2017)  -  Bundesministerium  für  Arbeit  und  Soziales  (2017):  Alterssicherung  in 
Deutschland 2015, Forschungsbericht 474/Z 

BMAS (2017) - Bundesministerium für Arbeit und Soziales (2017): Sozialbericht 2017 

BMAS (2019) – Bundesministerium für Arbeit und Soziales (2019): Sozialbudget 2019 

BMFSFJ (2024) – Bundesministerium für Familien, Senioren, Frauen und Jugend (2024): online 
accessible: https://www.bmfsfj.de/blob/94322/f60b561001ddcab0190b02c86a109a0d/merkblatt-
kinderzuschlag-data.pdf 

Deutsche Bundesbank (2017) - Ergebnisse der Gesamtwirtschaftlichen Finanzierungsrechnung 
für  Deutschland  2011-2016:  Nettogeldvermögen  privater  Haushalte;  Housing  expenditures: 
Statistisches Bundesamt: Verbraucherpreise - Verbraucherpreisindex für Deutschland. 

Deutsche  Rentenversicherung:  Rentenversicherung 
rentenversicherung.de/cae/servlet/.../01_rv_in_zahlen_2013.pdf 

in  Zahlen 

(2016):  www.deutsche-

Deutsche  Rentenversicherung 
(2016):  http://www.deutsche-
(2017):  Aktuelle  Daten 
rentenversicherung.de/Allgemein/de/Inhalt/6_Wir_ueber_uns/03_fakten_und_zahlen/03_statisti
ken/02_statistikpublikationen/07_aktuelle_daten.html 

EUROMOD 
https://www.iser.essex.ac.uk/euromod/using-euromod/country-reports/ 

Country 

Report 

for 

Germany 

EUROMOD 
https://www.iser.essex.ac.uk/euromod/using-euromod/country-reports/ 

Country 

Report 

for 

Germany 

(2009-2013): 

(2011-2016): 

Eurostat (2016) – EU-SILC 065 (2016 operation) – Description of Target Variables: Cross-
sectional and longitudinal, 2016 operation (Version October 2017) 

Fossen,  F.  M.  (2009),  “Would  a  Flat-Rate  Tax  Stimulate  Entrepreneurship  in  Germany?  A 
Behavioural Microsimulation Analysis Allowing for Risk”, Fiscal Studies 30(2), 179-218. 

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Fossen, F. M., and S. Bach (2008) “Reforming the German Local Business Tax: Lessons from an 
International  Comparison  and  a  Microsimulation  Analysis”,  FinanzArchiv  –  Public  Finance 
Analysis 64(2), 245-272. 

Grabka, M. (2014): Codebook for the §PEQUIV File 1984-2013. CNEF variables with extended 
income information for the SOEP. Data Documentation 74, DIW Berlin.  

Minijob  Zentrale  (2022):  Abgaben  für  gewerbliche  450-Euro  Minijobs;  online  accessible: 
https://www.minijob-
zentrale.de/DE/01_minijobs/02_gewerblich/01_grundlagen/01_450_euro_gewerbe/02_abgaben
_gewerbliche/node.html 

Report of the Federal Government to the Parliament (2014): Zwanzigster Bericht nach § 35 des 
Bundesausbildungsförderungsgesetzes  zur  Überprüfung  der  Bedarfssätze,  Freibeträge  sowie 
Vomhundertsätze und Höchstbeträge nach § 21 Absatz 2  

Schulze  Buschoff,  K.  (2007),  “‚Neue  Selbstständige‘  und  soziale  Sicherheit:  ein  europäischer 
Vergleich”, WSI Mitteilungen 7, 387–93. 

Statistisches Bundesamt: Statistical Year Books 2015;2016;2017. 

Statistisches Bundesamt Deutschland (2016); Finanzen und Steuern – Versorgungsempfänger des 
öffentlichen Dienstes (2016), Fachserie 14, Reihe 6.1  

Statistisches  Bundesamt  Deutschland  (2017);  Finanzen  und  Steuern  –  Steuerhaushalt  (2016), 
Fachserie 14, Reihe 4. 

Statistisches 
(2018): 
Inlandsproduktberechnung, Vierteljahresergebnisse. Fachserie 18, Reihe 1.2. 

Volkswirtschaftliche 

Bundesamt 

Gesamtrechnungen: 

Statistisches  Bundesamt  (2019):  Wirtschaftsrechnungen  -  LEBEN  IN  EUROPA  (EU-SILC) 
Einkommen und Lebensbedingungen in Deutschland und der Europäischen Union. Fachserie 15, 
Reihe 3. 

Steiner,  V.,  K.  Wrohlich,  P.  Haan,  and  J.  Geyer  (2008)  “Documentation  of  the  Tax-Benefit 
Microsimulation Model STSM: Version 2008”, DIW Data Documentation 31, German Institute 
for Economic Research. 

  Sources for tax-benefit descriptions/rules 

http://www.gesetze-im-internet.de/ 

http://www.buzer.de/ 

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ANNEX 1. UPRATING FACTORS 

Table A1. Raw indices for deriving EUROMOD uprating factors 

Index 

Constant 
name 

Years 

Source 

Consumer Price Index (2015=100) 

$f_cpi 

109.24  

118.71  

125.87  

130.0 

Eurostat; for 2024 indicator ZCPIH from 
DG ECFIN 

2021 

2022 

2023 

2024 

Income 
components 
uprated by the 
index 

yxy01 – yxy06, kfb, 
ypp, ysv, bunot, 
buntr, byr, bhl, 
bsaam, bsapu, bsaot, 
pdiot, pdiwr, poapu, 
poa00, poaps, 
poaps01, poaps02, 
poaab, tpr, tad, kivho, 
xmp, xpp, kfbcc, 
tinta*, all sim. ben. 

Harmonized Consumer Price Index 
(2015 = 100) 
Average gross earnings; overall 
economy (EUR per year) 
Average gross earnings; agriculture and 
fishing (EUR per year) 
Average gross earnings; mining, 
manufacturing and utilities (EUR per 
year) 
Average gross earnings; construction 
(EUR per year) 
Average gross earnings; wholesale and 
retail trade (EUR per year) 
Average gross earnings; hotels and 
restaurants (EUR per year) 

$HICP 

109.24  

118.71  

126.8  

100  

$f_yem0 

29.28 

30.53 

32.39 

34.11 

$f_yem1 

14.63 

15.30 

16.57 

17.45 

$f_yem2 

34.43 

35.98 

38.51 

40.55 

$f_yem3 

25.69 

27.16 

28.60 

30.12 

$f_yem4 

$f_yem5 

25.79 

26.71 

28.49 

30.00 

17.32 

18.28 

19.50 

20.53 

Eurostat;  for  2024  indicator  ZCPIH  from 
DG ECFIN 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 

National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 

yem 

yem 

yem 

yem 

yem 

yem 

96 

 
 
 
 
 
 
 
 
 
EUROMOD Country Report – GERMANY 

Average gross earnings; transport and 
communication (EUR per year) 
Average gross earnings; financial 
intermediation (EUR per year) 
Average gross earnings; real state and 
business (EUR per year) 
Average gross earnings; public 
administration and defence (EUR per year) 
Average gross earnings; education (EUR 
per year) 
Average gross earnings; health and social 
work (EUR per year) 
Average gross earnings; other (EUR per 
year) 
Aggregated gross earnings; overall 
economy (billion EUR per year) 
Aggregated gross earnings; agriculture and 
fishing (billion EUR per year) 
Aggregated gross earnings; mining, 
manufacturing and utilities (billion EUR 
per year) 
Aggregated gross earnings; construction 
(billion EUR per year) 
Aggregated gross earnings; wholesale and 
retail trade (billion EUR per year) 
Aggregated gross earnings; hotels and 
restaurants (billion EUR per year)  
Aggregated gross earnings; transport and 
communication (billion EUR per year) 
Aggregated gross earnings; financial 
intermediation (billion EUR per year) 
Aggregated gross earnings; real state and 
business (billion EUR per year) 
Aggregated gross earnings; public 
administration and defence (billion EUR 
per year) 
Aggregated gross earnings; education 
(billion EUR per year) 

$f_yem6 

$f_yem7 

$f_yem8 

$f_yem9 

31.61 

32.97 

35.32 

37.20 

44.47 

47.06 

50.09 

52.74 

29.62 

31.19 

33.00 

34.75 

31.42 

33.11 

34.50 

36.33 

$f_yem10 

31.48 

32.63 

34.00 

35.80 

$f_yem11 

24.53 

25.74 

26.82 

28.24 

$f_yem12 

23.54 

24.21 

25.41 

26.76 

$f_yivwg0 

29.28 

30.53 

32.39 

34.11 

$f_yivwg1 

14.63 

15.30 

16.57 

17.45 

$f_yivwg2 

34.43 

35.98 

38.51 

40.55 

$f_yivwg3 

25.69 

27.16 

28.60 

30.12 

$f_yivwg4 

25.79 

26.71 

28.49 

30.00 

$f_yivwg5 

17.32 

18.28 

19.50 

20.53 

$f_yivwg6 

31.61 

32.97 

35.32 

37.20 

$f_yivwg7 

44.47 

47.06 

50.09 

52.74 

$f_yivwg8 

29.62 

31.19 

33.00 

34.75 

$f_yivwg9 

31.42 

33.11 

34.50 

36.33 

National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 

National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 

yem 

yem 

yem 

yem 

yem 

yem 

yem 

yivwg 

yivwg 

yivwg 

yivwg 

yivwg 

yivwg 

yivwg 

yivwg 

yivwg 

yivwg 

$f_yivwg10 

31.48 

32.63 

34.00 

35.80 

National  Statistical  Office,  National 
Accounts 

yivwg 

97 

 
 
EUROMOD Country Report – GERMANY 

Aggregated gross earnings; health and 
social work (billion EUR per year) 
Aggregated gross earnings; other (billion 
EUR per year) 
Lagged average gross earnings; overall 
economy (EUR per year) 
Lagged average gross earnings; agriculture 
and fishing (EUR per year) 
Lagged average gross earnings; mining, 
manufacturing and utilities (EUR per year) 
Lagged average gross earnings; 
construction (EUR per year) 
Lagged average gross earnings; wholesale 
and retail trade (EUR per year) 
Lagged average gross earnings; hotels and 
restaurants (EUR per year) 
Lagged average gross earnings; transport 
and communication (EUR per year) 
Lagged average gross earnings; financial 
intermediation (EUR per year) 
Lagged average gross earnings; real state 
and business (EUR per year) 
Lagged average gross earnings; public 
administration and defence (EUR per year) 
Lagged average gross earnings; education 
(EUR per year) 
Lagged average gross earnings; health and 
social work (EUR per year) 
Lagged average gross earnings; other 
(EUR per year) 
Aggregate self-employment income 
(billion Euro)*  
Aggregate income from capital in private 
households (billion Eur) 
HIPC Actual Rents for Housing (2005 = 
100, annual data) 

$f_yivwg11 

24.53 

25.74 

26.82 

28.24 

$f_yivwg12 

23.54 

24.21 

25.41 

26.76 

$f_yxy0 

$f_yxy1 

$f_yxy2 

$f_yxy3 

$f_yxy4 

$f_yxy5 

$f_yxy6 

$f_yxy7 

$f_yxy8 

$f_yxy9 

29.05 

29.28 

30.53 

32.39 

14.73 

14.63 

15.30 

16.57 

34.30 

34.43 

35.98 

38.51 

25.36 

25.69 

27.16 

28.60 

25.57 

25.79 

26.71 

28.49 

16.75 

17.32 

18.28 

19.50 

30.98 

31.61 

32.97 

35.32 

44.81 

44.47 

47.06 

50.09 

29.29 

29.62 

31.19 

33.00 

31.46 

31.42 

33.11 

34.50 

$f_yxy10 

31.50 

31.48 

32.63 

34.00 

$f_yxy11 

24.30 

24.53 

25.74 

26.82 

$f_yxy12 

22.39 

22.39 

22.39 

22.39 

$f_yse 

$f_yiy 

$f_housingren
ts 

216.97 

208.91 

220.49 

232.17 

351.89 

422.09 

422.09 

422.09 

109.02 

110.82 

113.09 

114.79 

Updating factor of 1 

$f_one 

1.00 

1.00 

1.00 

1.00 

National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
National  Statistical  Office,  National 
Accounts 
Eurostat 

yivwg 

yivwg 

yxy 

yxy 

yxy 

yxy 

yxy 

yxy 

yxy 

yxy 

yxy 

yxy 

yxy 

yxy 

yxy 

yse 

yiy, yiyot 

ypr,  bho,  xhc,  xhcrt, 
xhcot   xhcmomi 

yds, ydses_o 

98 

 
 
 
EUROMOD Country Report – GERMANY 

Current pension value (Eur, weighted 
average of West/East German values) 

$f_publicpensi
on 

34.05 

35.93 

37.24 

37.60 

Statutory 
Insurance 

Parameter, 

Public 

Pension 

pdi00,  poass,  psu, 
psuor, psuwd 

Average old-age pension for employees 
(Eur per month) 
Average wage for civil servants 
(Eur/month) 
Average old-age pension for civil servants 
(Eur per month) 
Average survivors' pension (Eur per 
month); Renten wegen Todes 
Average Orphans' Pension (Eur per month) 

Average Widows' Pension (Eur per month) 

$f_psuwd_av 

$f_psuor_av 

Aggregate income tax and ssc (billion 
Euro) 
Aggregate net wealth of private households 
(billion Euro)*  
Average disability pension (Eur per month) 
from pension insurance 

$f_tis 

$f_afc 

$f_poass_av 

993.00 

1054.00 

1092.45 

1102.99 

Public Pension Insurance 

$f_poacs 

4240.00 

4280.00 

4517.28 

4747.66 

National Statistical Office 

poacs 

$f_poacs_av 

3160.00 

3170.00 

3400.00 

3432.81 

National Statistical Office 

$f_psu_av 

630.00 

664.00 

688.22 

694.86 

Public Pension Insurance 

205.00 
652.00 
508.40 

216.00 
688.00 
542.95 

223.88 
713.10 
563.51 

226.04 
719.98 
591.12 

Public Pension Insurance 

Public Pension Insurance 

National Statistical Office 

381.02 

297.86 

297.86 

297.86 

German Central Bank 

tis 

afc 

$f_pdi00_av 

877.00 

933.00 

967.03 

976.37 

Public Pension Insurance 

*  Consumer Price  Index for 2020 has been uprated according to indicator ZCPIH from  DG ECFIN. Earnings for 2020 have been uprated according to DG ECFIN 
projections on earnings (nominal compensation per employee). The data is available under: http://ec.europa.eu/economy_finance/ameco/user/serie/SelectSerie.cfm. 
The rest of variables has been provisionally uprated for 2020 by using the average harmonized price index for the months January-March 2020. 

99 

 
 
 
 
 
 
 
 
 
 
 
EUROMOD Country Report – GERMANY 

ANNEX 2. POLICY EFFECTS IN 2023-2024 

In this section we analyse the direct tax-benefit policy effect on household disposable income in 
Germany between 2023 and 2024. We try to understand how changes (or non-changes) to tax-
benefit  policies  have  affected  household  incomes,  abstracting  from  changes  in  the  population 
characteristics  (e.g.  increased  unemployment)  and  the  distribution  of  market/original  gross 
incomes (e.g. reduction in wages). It should be noted that tax-benefit policies in a given year are 
taken as of 30th

 of June. 

Table A2.1 and Figure A2.1 show the policy effect measured in real terms by income component 
and income decile group. The effect is estimated as the difference between simulated household 
net income under the 2024 tax-benefit policies (deflating the tax-benefit monetary parameters by 
Eurostat’s Harmonized Index of Consumer Prices, HICP) and net incomes simulated under 2023 
policies, as a percentage of mean equivalised household disposable income in 2023. Households 
are ranked based on their equivalised household disposable income. The total policy effect on 
household incomes is decomposed into the different components: public pensions, means-tested 
benefits, non-means-tested benefits, employee and self-employed social insurance contributions 
(SIC), other SIC and direct taxes. We isolate the policy effect from changes in market/original 
income, i.e. changes to market/original incomes are not considered as part of the policy effect and 
so, they have no effect on disposable income. 

From 2023 to 2024, the average household disposable income increased by 0.54%. A look at the 
effects  across  decile  groups  reveals  a  U-shaped  distribution,  with  lower  and  higher  deciles 
experiencing a more beneficial policy effect compared to middle-income classes. Deciles 4 to 6 
are also the only deciles dealing with a slightly negative policy effect between 2023 and 2024. 
The largest policy impact can be found in the lowest decile of the distribution, where the increase 
in disposable income reaches 2.61%, whereas disposable income of the 5th decile decreased by 
0.21%.  On  average,  means-tested  benefits  (0.30%  increase)  and  direct  taxes  (0.78%  increase) 
contributed the most to the on average increasing effect on disposable income. 

Compared  to  last  year,  inflation  has  decreased  substantially  while  some  elements  of  the  tax-
transfer system are adjusted retrospectively such that the price surge in 2023 led to the upward 
correction of e.g. tax parameters. 

Public  pensions  have  been  increased  in  nominal  terms  again.  However,  these  adjustments  are 
smaller than the CPI increases. The policy effect of public pensions is  mostly regressive, with 
largest losses in disposable income in the 2nd and 3rd decile. This is probably the case because 
recipients  of  public  pensions  are  typically  concentrated  in  the  lower  deciles  of  the  disposable 
income distribution as income from (public) pensions is in general substantially less than labour 
income.  In  addition  to  this,  public  pensions  usually  make  up  a  proportionally  bigger  part  of 
disposable income in poorer pensioners’ households than in richer ones, that in some cases receive 
additional income, for example from capital or rental income. 

In case of direct taxes, the higher income classes benefit the most from the significant adjustment 
of the income tax bracket thresholds, which overcompensates the CPI increase substantially this 
year as tariff components have been adjusted based on the forecasted CPI development for 2023. 
This forecast stemmed from late 2022, when the government was expecting energy prices in 2023 
to be much higher than they turned out to be.     

Means-tested benefits like citizen’s benefit and social assistance typically make up a higher share 
of disposable income in the lower parts of the income distribution. After the reform of the citizen’s 
benefit, housing benefits and additional child benefit in 2023, the rates for these benefits also 
increased substantially in 2024 following the high inflation in 2023. The first three deciles of the 

100 

 
 
EUROMOD Country Report – GERMANY 

income distribution experience a large increase in disposable income between 1 % and 3.4 %. It 
is  important  to  note,  however,  that  the  policy  effects  are  calculated  assuming  full  take-up  of 
benefits,  which  could  lead  to  an  over-estimation  of  the  progressive  effects  of  means-tested 
benefits. 

Non-means tested benefits decrease disposable income on average and also for every decile with 
a  slightly  regressive  effect.  Child  benefits,  the  most  relevant  non-means  tested  benefit,  make 
typically up a larger share of disposable income in lower income groups. In addition, the rates for 
child benefits have not been changed from 2023 to 2024. 

Table A2.1: Policy effect in 2023-24, using CPI-indexation, % 
Employee 
Decile  Original 
SIC 
income 

Public 
pensions 

Means- 
tested 
benefits 

Self-
employed 
SIC 

Other 
SIC 

Direct 
taxes 

Disposable 
income 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

Total 

0.00 
0.00 
0.00 
0.00 
0.01 
0.00 
0.01 
0.02 
0.01 
0.02 
0.01 

-0.41 
-0.44 
-0.40 
-0.34 
-0.30 
-0.20 
-0.11 
-0.02 
0.05 
0.08 
-0.12 

3.36 
1.69 
0.95 
0.30 
0.01 
0.00 
0.01 
-0.01 
0.00 
0.00 
0.30 

-0.07 
-0.14 
-0.13 
-0.16 
-0.21 
-0.25 
-0.29 
-0.31 
-0.34 
-0.30 
-0.26 

-0.02 
-0.01 
-0.01 
-0.01 
-0.01 
-0.01 
-0.01 
-0.03 
-0.01 
-0.01 
-0.01 

-0.04 
-0.08 
-0.09 
-0.09 
-0.09 
-0.09 
-0.07 
-0.06 
-0.06 
-0.04 
-0.07 

0.06 
0.24 
0.36 
0.44 
0.51 
0.53 
0.58 
0.65 
0.78 
1.60 
0.78 

2.61 
1.04 
0.49 
-0.02 
-0.21 
-0.10 
0.05 
0.17 
0.38 
1.33 
0.54 

Non 
means- 
tested 
benefits 
-0.26 
-0.21 
-0.20 
-0.16 
-0.12 
-0.09 
-0.07 
-0.07 
-0.05 
-0.02 
-0.09 

Notes: Other SIC include SIC paid by pensioners and non-working individuals. 

101 

 
 
 
 
 
 
EUROMOD Country Report – GERMANY 

Figure A2.1: Policy effect in 2023-24, using CPI-indexation, % 

4.00

3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00

-0.50

-1.00

-1.50

Decile 1 Decile 2 Decile 3 Decile 4 Decile 5 Decile 6 Decile 7 Decile 8 Decile 9 Decile 10 Total

Original income

Public pensions

Means-tested benefits

Non means- tested benefits

Employee SIC

Other SIC

Direct taxes

Self-employed SIC

Disposable income

102 

 
 
 
 
 
EUROMOD Country Report – GERMANY 

ANNEX 3. VALIDATION TABLES 

103 

Table A3.1. Original income in EUROMOD - Number of recipients (thousands)

Earnings (ils_earns)
Employment income (yem)
Self-employment income (yse)
Other original income (ils_origy - 
ils_earns)
Investment income (yiy)
Property income (ypr)
Income of children under 16 (yot)
Private pension (ypp)
Private transfers received (ypt)
Maintenance payments (xmp)
Contribution private health 
insurance (xhi_s)

Continued...

Earnings (ils_earns)
Employment income (yem)
Self-employment income (yse)
Other original income (ils_origy - 
ils_earns)
Investment income (yiy)
Property income (ypr)
Income of children under 16 (yot)
Private pension (ypp)
Private transfers received (ypt)
Maintenance payments (xmp)
Contribution private health 
insurance (xhi_s)

Simulated

EUROMOD

External

Ratio

(Y / N)

2021

2022

2023

2024

2021

2022

2023

2024

2021

2022

2023

2024

N
N

N
N
N
N
N
N
Y

40,054
3,917

40,054
3,917

40,054
3,917

40,054
3,917

41,101
3,952

41,781
3,894

42,163
3,848

11,680
6,544
149
1,298
1,883
2,246
718

11,680
6,544
149
1,298
1,883
2,246
748

11,680
6,544
149
1,298
1,883
2,246
785

11,680
6,544
149
1,298
1,883
2,246
801

NaN
NaN
NaN
NaN
NaN
NaN
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

NaN
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

0.97
0.99

NaN
NaN
NaN
NaN
NaN
NaN
NaN

0.96
1.01

NaN
NaN
NaN
NaN
NaN
NaN
NaN

0.95
1.02

NaN
NaN
NaN
NaN
NaN
NaN
NaN

NaN
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

Source

National Accounts/Destatis
National Accounts/Destatis

-
-
-
German Socio-Economic Panel
German Socio-Economic Panel
-
-

Comments

-
-

-
-
-
-
-
-
-

104Table A3.2. Original income in EUROMOD - Annual amounts (millions)

Simulated

EUROMOD

External

Ratio

(Y / N)

2021

2022

2023

2024

2021

2022

2023

2024

2021

2022

2023

2024

Earnings (ils_earns)
Employment income (yem)
Self-employment income (yse)
Other original income (ils_origy - 
ils_earns)
Investment income (yiy)
Property income (ypr)
Income of children under 16 (yot)
Private pension (ypp)
Private transfers received (ypt)
Maintenance payments (xmp)
Contribution private health 
insurance (xhi_s)

N
N

N
N
N
N
N
N
Y

1,630,225 1,705,536 1,805,990 1,901,743 1,616,289 1,714,342 1,841,505
NaN
115,291

103,741

109,491

107,743

NaN

NaN

15,586
46,273
271
7,962
11,244
13,187
4,294

18,695
47,037
282
8,652
11,724
14,331
4,381

18,695
48,000
299
9,174
12,438
15,195
4,586

18,695
48,722
315
9,475
13,098
15,694
4,710

NaN
NaN
NaN
NaN
NaN
NaN
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

NaN
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

1.01
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

0.99
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

0.98
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

NaN
NaN

NaN
NaN
NaN
NaN
NaN
NaN
NaN

105Table A3.3. Direct taxes and SIC - Number of payers (thousands)

Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)

2021

2022

2023

2024

2021

2022

2023

2024 2021 2022 2023 2024

2021

2022

2023

2024 2021 2022 2023 2024

Direct taxes (ils_tax)

Income taxation (Einkommensteuer) 
(tin_s)
Capital income taxation (tinkt_s)

Property tax (tpr)

Employee Social Insurance 
Contributions (ils_sicee)
employee SIC for old-age (tsceepi_s)

employee SIC for health (tsceehl_s)

employee SIC for long-term care 
(tsceeci_s)
employee SIC for unemployment 
(tsceeui_s)
employee SIC for statutory accident 
insurance (tsceeac_s)
Self-employed Social Insurance 
Contributions (ils_sicse)
self-employed SIC for old-age (tscsepi_s)

self-employed SIC for health (tscsehl_s)

Employer Social Insurance Contributions 
(ils_sicer)
employer SIC for old-age (tscerpi_s)

employer SIC for health (tscerhl_s)

employer SIC for long-term care 
(tscerci_s)
employer SIC for unemployment 
(tscerui_s)
employer SIC for statutory accident 
insurance (tscerac_s)
Credited Contributions (ils_sicct)

Other Contributions (ils_sicot)

pensioner SIC for health (tscpehl_s)

pesnioner SIC for long-term care 
(tscpeci_s)

Y

Y

N

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

47,708 49,298 47,889 47,533

3,146

3,502

3,083

3,083

0

0

0

0

0

0

16,801 16,801 16,801 16,801 16,801 16,801 16,801 16,801 1.00 1.00 1.00 1.00

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

35,604 35,833 35,562

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN 33,922 34,525 34,799

NaN 1.05 1.04 1.02 NaN

35,604 35,833 35,562 35,756

35,604 35,833 35,562 35,756

35,604 35,833 35,562 35,904

35,604 35,833 35,562 35,756

0

0

0

0

765

765

765

765

1,896

1,922

1,873

1,884

36,839 36,839 36,839 36,839

36,839 36,839 36,839 36,839

35,604 35,833 35,562 35,756

35,604 35,833 35,562 35,756

35,604 35,833 35,562 35,756

17,192 17,131 17,104 17,109

17,192 17,131 17,104 17,109

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0 0.00 0.00 0.00 0.00

0 0.00 0.00 0.00 0.00

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0 0.00 0.00 0.00 0.00

0 0.00 0.00 0.00 0.00

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0 0.00 0.00 0.00 0.00

0 0.00 0.00 0.00 0.00

NaN

NaN

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

106Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)
Y

2021
929

2022
893

2023
936

2024
872

2021
0

2022
0

2023
0

2024 2021 2022 2023 2024
0 0.00 0.00 0.00 0.00

2021
NaN

2022
NaN

2023
NaN

2024 2021 2022 2023 2024
NaN NaN NaN NaN NaN

health/long-term care insurance 
contribution for non-working (tscot_s)

Continued...

Source

Comments

Direct taxes (ils_tax)

Income taxation (Einkommensteuer) 
(tin_s)
Capital income taxation (tinkt_s)

-

-

Property tax (tpr)

OECD Revenue Statistics

Employee Social Insurance 
Contributions (ils_sicee)
employee SIC for old-age (tsceepi_s)

Nationals Accounts/Destatis

employee SIC for health (tsceehl_s)

Nationals Accounts/Destatis

employee SIC for long-term care 
(tsceeci_s)
employee SIC for unemployment 
(tsceeui_s)
employee SIC for statutory accident 
insurance (tsceeac_s)
Self-employed Social Insurance 
Contributions (ils_sicse)
self-employed SIC for old-age (tscsepi_s)

Nationals Accounts/Destatis

Nationals Accounts/Destatis

-

National Accounts/Destatis

self-employed SIC for health (tscsehl_s)

National Accounts/Destatis

Employer Social Insurance Contributions 
(ils_sicer)
employer SIC for old-age (tscerpi_s)

National Accounts/Destatis

employer SIC for health (tscerhl_s)

National Accounts/Destatis

employer SIC for long-term care 
(tscerci_s)
employer SIC for unemployment 
(tscerui_s)
employer SIC for statutory accident 
insurance (tscerac_s)
Credited Contributions (ils_sicct)

Other Contributions (ils_sicot)

National Accounts/Destatis

National Accounts/Destatis

National Accounts/Destatis

pensioner SIC for health (tscpehl_s)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

107Continued...

pesnioner SIC for long-term care 
(tscpeci_s)
health/long-term care insurance 
contribution for non-working (tscot_s)

Source
-

-

Comments
-

-

108Table A3.4. Direct taxes and SIC - Annual amounts (millions)

Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)

2021

2022

2023

2024

2021

2022

2023

2024 2021 2022 2023 2024

2021

2022

2023

2024 2021 2022 2023 2024

Direct taxes (ils_tax)

Income taxation (Einkommensteuer) 
(tin_s)
Capital income taxation (tinkt_s)

Property tax (tpr)

Employee Social Insurance 
Contributions (ils_sicee)
employee SIC for old-age (tsceepi_s)

employee SIC for health (tsceehl_s)

employee SIC for long-term care 
(tsceeci_s)
employee SIC for unemployment 
(tsceeui_s)
employee SIC for statutory accident 
insurance (tsceeac_s)
Self-employed Social Insurance 
Contributions (ils_sicse)
self-employed SIC for old-age 
(tscsepi_s)
self-employed SIC for health 
(tscsehl_s)
Employer Social Insurance 
Contributions (ils_sicer)
employer SIC for old-age (tscerpi_s)

employer SIC for health (tscerhl_s)

employer SIC for long-term care 
(tscerci_s)
employer SIC for unemployment 
(tscerui_s)
employer SIC for statutory accident 
insurance (tscerac_s)
Credited Contributions (ils_sicct)

Other Contributions (ils_sicot)

pensioner SIC for health (tscpehl_s)

pesnioner SIC for long-term care 
(tscpeci_s)

Y

Y

N

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

364,429 387,723 399,477 412,040

NaN

NaN

NaN

NaN NaN NaN NaN NaN 361,681 374,538 384,907

NaN 1.01

1.04

1.04 NaN

2,929

5,598

3,654

6,083

3,481

6,450

261,085 262,789 278,235

3,481

6,662

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN

NaN

5,598

5,598

5,598

5,598

1.00

1.09

1.15

1.19

5,994

6,113

NaN

NaN

NaN NaN NaN NaN NaN

NaN 0.93

1.00 NaN NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN 229,146 246,434 262,636

NaN 1.14

1.07

1.06 NaN

122,282 126,890 133,082 139,844

NaN

NaN

NaN

NaN NaN NaN NaN NaN 110,967 118,807 124,838

NaN 1.10

1.07

1.07 NaN

103,024

98,191 104,223 109,971

NaN

NaN

NaN

NaN NaN NaN NaN NaN 86,109

92,704

98,429

NaN 1.20

1.06

1.06 NaN

20,001

21,336

22,327

26,988

NaN

NaN

NaN

NaN NaN NaN NaN NaN 17,419

19,239

21,552

NaN 1.15

1.11

1.04 NaN

15,778

16,373

18,603

19,548

NaN

NaN

NaN

NaN NaN NaN NaN NaN 14,651

15,684

17,817

NaN 1.08

1.04

1.04 NaN

0

0

0

0

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

12,348

11,969

12,551

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

9,365

9,671

10,039

NaN 1.32

1.24

1.25 NaN

3,746

3,654

3,831

4,008

NaN

NaN

NaN

NaN NaN NaN NaN NaN

1,497

1,597

1,693

NaN 2.50

2.29

2.26 NaN

8,602

8,315

8,720

9,048

NaN

NaN

NaN

NaN NaN NaN NaN NaN

6,510

6,674

6,970

NaN 1.32

1.25

1.25 NaN

267,462 279,008 297,170

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN 253,465 266,727 283,901

NaN 1.06

1.05

1.05 NaN

123,325 127,789 134,895 141,502

NaN

NaN

NaN

NaN NaN NaN NaN NaN 118,006 123,073 129,620

NaN 1.05

1.04

1.04 NaN

96,121

98,965 105,799 111,418

18,339

18,909

19,805

23,139

NaN

NaN

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN 90,734

94,871 100,861

NaN 1.06

NaN NaN NaN NaN NaN 16,969

17,843

20,043

NaN 1.08

1.04

1.06

1.05 NaN

0.99 NaN

15,836

16,431

18,759

19,701

NaN

NaN

NaN

NaN NaN NaN NaN NaN 16,054

16,860

18,733

NaN 0.99

0.97

1.00 NaN

13,841

16,914

17,913

18,876

NaN

NaN

NaN

NaN NaN NaN NaN NaN 11,702

14,080

14,644

NaN 1.18

1.20

1.22 NaN

26,063

27,063

28,547

29,242

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

10,133

10,522

10,893

12,552

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

109Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)
Y

2021
2,323

2022
2,175

2023
2,389

2024
2,391

2021
NaN

2022
NaN

2023
NaN

2024 2021 2022 2023 2024
NaN NaN NaN NaN NaN

2021
NaN

2022
NaN

2023
NaN

2024 2021 2022 2023 2024
NaN NaN NaN NaN NaN

health/long-term care insurance 
contribution for non-working 
(tscot_s)

110Table A3.5. Benefits - Number of recipients (thousands)

Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)

2021

2022

2023

2024

2021

2022

2023

2024 2021 2022 2023 2024

2021

2022

2023

2024 2021 2022 2023 2024

Pensions (ils_pen)

Old-age pension (poa00)

Old-age pension for civil servants (poacs)

Pension for employees in public service 
(Rente der Zusatzversorgungskassen des 
öffentlichen Dienstes) (poapu)

Pension schemes for self-employed, 
freelancers, and farmers (Rente 
berufsständischer Versorgungswerke, 
landwirtschaftlicher Alterskassen und 
Landabgaberenten) and Supplements to 
old-age pension insurance contributions 
for farmers (Zuschüsse der 
landwirtschaftlichen Alterskassen)
 (poaps)
Old-age pension of statutory pension 
insurance (poass)
Old-age pension from a foreign country 
(Auslandsrente) (poaab)
Pensions for reduced ability to work 
(pdi00)
Pensions for disability to work for civil 
servants (pdiot)
Widow(er)'s pension (psuwd)

Orphan's pension (psuor)

Benefits for war victims and burden 
sharing (pdiwr)
Disability pension from stat. acc. 
Insurance (Rente der gesetzlichen 
Unfallversicherung); NOTE: we simulate 
the pension for individuals aged under 65 
(pdiss_s)

N

N

N

N

N

N

N

N

N

N

N

Y

1,783

1,783

1,783

1,783

1,783

1,783

1,783

1,783

1,660

1,660

1,660

1,660

1,660

1,660

1,660

1,660

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

1,737

1,758

1,773

NaN 0.96

0.94

0.94 NaN

581

581

581

581

581

581

581

581

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

228

228

228

228

228

228

228

228

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

15,558 15,558 15,558 15,558 15,558 15,558 15,558 15,558

1.00

1.00

1.00

1.00 18,518 18,575 18,743

NaN 0.84

0.84

0.83 NaN

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

1,222

1,213

NaN

NaN 0.00

0.00 NaN NaN

1,291

1,291

1,291

1,291

1,291

1,291

1,291

1,291

1.00

1.00

1.00

1.00

1,809

1,790

1,761

NaN 0.71

0.72

0.73 NaN

100

100

100

100

100

100

100

100

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

3,856

3,856

3,856

3,856

3,856

3,856

3,856

3,856

202

9

202

9

202

9

202

9

202

9

202

9

202

9

202

9

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN

NaN

12

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

NaN NaN 0.72 NaN NaN

281

281

281

281

143

143

143

143

1.97

1.97

1.97

1.97

730

711

692

NaN 0.38

0.40

0.41 NaN

111Disability pensions for those aged over 
65, that include the Disability pension 
from stat. acc. Insurance (Rente der 
gesetzlichen Unfallversicherung) and the 
Long-term care benefit from the pension 
insurance (Pflegegeld) (poadi)

Benefits for war victims 
(Lastenausgleichsrente, Rente der 
Kriegsopferversorgung, SED-Opferrente) 
(poawr)
Means-tested benefits (ils_benmt)

Unemployment benefits II and social 
benefits (ALG II und Sozialgeld) (bunnc_s)

General social assistance (Sozialhilfe) 
(bsa00_s)
Old-age social assistance 
(Grundsicherung im Alter) (bsaoa_s)
Advances on alimony payments 
(Unterhaltsvorschuss) (bsaam)
Advances on alimony payments 
(Unterhaltsvorschuss) (bcham)
Benefits from non-profitable charity 
organizations (Geldleistungen von 
Wohlfahrtsorganisationen, z.B. AWO) 
(bsapu)
Additional child benefits (Kinderzuschlag) 
(bchot_s)
Education benefits (BaFöG) (bed_s)

Main housing benefits (Wohngeld) 
(bho00_s)
Allowance to the Agricultural Pension 
Funds (Zuschüsse zu landwirtschaftl. 
Alterskassen) (bsa01)
Education Allowance (Bildungspaket) 
(bched_s)
Other social assistance (Sozialgeld) 
(bsaot_s)
One- off payment for unemployed and 
social assistance recipients (bsaxp_s)

Heating bonus (Heizkostenzuschuss) 
(bhtxp_s)

Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)
N

2021
184

2022
184

2023
184

2024
184

2021
184

2022
184

2023
184

2024 2021 2022 2023 2024
1.00
1.00

1.00

1.00

184

2021
NaN

2022
NaN

2023
NaN

2024 2021 2022 2023 2024
NaN NaN NaN NaN NaN

N

Y

Y

Y

N

N

N

Y

Y

Y

N

Y

Y

Y

Y

26

26

26

26

26

26

26

26

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

3,625

3,606

3,305

3,622

3,792

3,792

3,792

3,792

0.96

0.95

0.87

0.96

2,528

2,501

2,668

NaN 1.43

1.44

1.24 NaN

162

165

121

144

464

464

464

464

0.35

0.36

0.26

0.31

215

226

225

NaN 0.75

0.73

0.54 NaN

931

935

822

970

805

805

805

805

1.16

1.16

1.02

1.21

1,112

1,164

1,223

NaN 0.84

0.80

0.67 NaN

1,028

1,028

1,028

1,028

1,028

1,028

1,028

1,028

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

1,028

1,028

1,028

1,028

1,028

1,028

1,028

1,028

1.00

1.00

1.00

1.00

833

825

830

NaN 1.23

1.25

1.24 NaN

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

1,003

954

1,236

1,428

1,035

1,035

1,035

1,035

0.97

0.92

1.19

1.38

293

285

363

NaN 3.42

3.35

3.40 NaN

974

963

1,043

971

1,398

1,249

3,811

3,193

832

470

832

470

832

470

832

470

1.17

2.97

1.16

2.66

1.25

8.11

1.17

6.79

429

595

419

652

441

NaN 2.27

1,174

NaN 2.35

2.30

1.92

2.36 NaN

3.25 NaN

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

1,524

1,497

1,732

1,846

607

607

607

607

2.51

2.47

2.85

3.04

NaN

NaN

NaN

NaN NaN NaN NaN NaN

395

391

391

452

716

716

716

716

0.55

0.55

0.55

0.63

448

485

539

NaN 0.88

0.81

0.73 NaN

0

6,164

0

0

1,167

1,167

0

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

112Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)

2021

2022

2023

2024

2021

2022

2023

2024 2021 2022 2023 2024

2021

2022

2023

2024 2021 2022 2023 2024

Non-means-tested benefits (ils_bennt)

Child benefits (Kindergeld) (bch00_s)

Maternity leave (bmact_s)

Parental leave (bplct_s)

Unemployment benefits I (ALG I) 
(bunct_s)
Sickness Benefits (Krankengeld der GKV, 
prvt. Pflegezusatz- oder 
Krankentagegeldversicherung) (bhl_s)
Long-term care benefits from pension 
insurance (Pflegegeld) (pdica)
Benefits for business start-ups 
(Förderung der Existenzgründung: Ich-
AG, Überbrückungsgeld) (bunot)
Benefits for re-training 
(Umschulungszuschüsse) (buntr)
Severance pay (Kurzarbeitergeld, 
Schlechtwettergeld, Wintergeld, 
Konkursausfallgeld, Umschulungsgeld, 
u.ä.) (ysv)
Benefits for early retirement 
(Vorruhestandsgeld) (byr)
Care benefits for children (Pflegegeld für 
Pflegekinder, Pflegegeld für 
pflegebedürftige Kinder nach SGB XI, 
Betreuungsgeld) (bfaot)
Unemployment benefits: lump-sum 
(bunls)
Simulated wage compensation 
(Kurzarbeitergeld) (bwkmcee_s)
Child bonus (covid-19 policy) (bchls_s)

Lump-sum energy transfer 
(Energiepreispauschale) (blsxp_s)
Lump-sum energy transfer (for students) 
(blsxpsd_s)

Y

Y

Y

Y

Y

N

N

N

N

N

N

N

Y

Y

Y

Y

9,262

9,262

9,262

9,262 10,844 10,844 10,844 10,844

951

697

951

697

951

697

951

696

476

476

476

476

1,131

1,131

1,131

1,131

1,106

1,106

1,106

1,106

1,151

1,151

1,151

1,151

0.85

2.00

0.62

0.96

0.85

2.00

0.62

0.96

0.85

2.00

0.62

0.96

0.85

2.00

0.61

0.96

9,885 10,080 10,372

NaN 0.94

0.92

0.89 NaN

NaN

1,009

NaN

998

NaN

954

NaN NaN NaN NaN NaN

NaN 0.69

0.70

0.75

0.73 NaN

0.71 NaN

1,461

1,482

1,556

NaN 0.76

875

875

875

875

1,148

1,148

1,148

1,148

0.76

0.76

0.76

0.76

NaN

NaN

NaN

NaN NaN NaN NaN NaN

366

366

366

366

366

366

366

366

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

34

34

34

34

34

34

34

34

1.00

1.00

1.00

1.00

20

20

25

NaN 1.71

1.71

1.36 NaN

771

771

771

771

771

771

771

771

1.00

1.00

1.00

1.00

178

171

184

NaN 4.33

4.51

4.19 NaN

2,022

2,022

2,022

2,022

2,022

2,022

2,022

2,022

1.00

1.00

1.00

1.00

1,852

426

241

NaN 1.09

4.75

8.39 NaN

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

280

NaN

NaN

NaN 0.00 NaN NaN NaN

7,860

7,860

7,860

7,860

7,860

7,860

7,860

7,860

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

170

170

170

170

170

170

170

170

1.00

1.00

1.00

1.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0

0

9,267

9,267

0 58,273

0

0

0

0

0

2,381

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

Continued...

Pensions (ils_pen)

Source

Old-age pension (poa00)

Federal Ministry of Labour and Social Affairs

Comments

-

113Continued...

Old-age pension for civil servants (poacs)

Source
National Accounts/Federal Ministry of Labour and Social Affairs

Comments
-

Pension for employees in public service 
(Rente der Zusatzversorgungskassen des 
öffentlichen Dienstes) (poapu)

Pension schemes for self-employed, 
freelancers, and farmers (Rente 
berufsständischer Versorgungswerke, 
landwirtschaftlicher Alterskassen und 
Landabgaberenten) and Supplements to 
old-age pension insurance contributions 
for farmers (Zuschüsse der 
landwirtschaftlichen Alterskassen)
 (poaps)
Old-age pension of statutory pension 
insurance (poass)
Old-age pension from a foreign country 
(Auslandsrente) (poaab)
Pensions for reduced ability to work 
(pdi00)
Pensions for disability to work for civil 
servants (pdiot)
Widow(er)'s pension (psuwd)

Orphan's pension (psuor)

Benefits for war victims and burden 
sharing (pdiwr)
Disability pension from stat. acc. 
Insurance (Rente der gesetzlichen 
Unfallversicherung); NOTE: we simulate 
the pension for individuals aged under 65 
(pdiss_s)
Disability pensions for those aged over 
65, that include the Disability pension 
from stat. acc. Insurance (Rente der 
gesetzlichen Unfallversicherung) and the 
Long-term care benefit from the pension 
insurance (Pflegegeld) (poadi)

Benefits for war victims 
(Lastenausgleichsrente, Rente der 
Kriegsopferversorgung, SED-Opferrente) 
(poawr)

Federal Ministry of Labour and Social Affairs

-

Deutsche Rentenversicherung

Deutsche Rentenversicherung

Deutsche Rentenversicherung

-

-

-

Destatis

Statutory Accident Insurance

-

-

-

-

-

-

-

-

-

-

-

-

-

-

114Continued...

Means-tested benefits (ils_benmt)

Unemployment benefits II and social 
benefits (ALG II und Sozialgeld) (bunnc_s)

General social assistance (Sozialhilfe) 
(bsa00_s)
Old-age social assistance 
(Grundsicherung im Alter) (bsaoa_s)
Advances on alimony payments 
(Unterhaltsvorschuss) (bsaam)
Advances on alimony payments 
(Unterhaltsvorschuss) (bcham)
Benefits from non-profitable charity 
organizations (Geldleistungen von 
Wohlfahrtsorganisationen, z.B. AWO) 
(bsapu)
Additional child benefits (Kinderzuschlag) 
(bchot_s)
Education benefits (BaFöG) (bed_s)

Main housing benefits (Wohngeld) 
(bho00_s)
Allowance to the Agricultural Pension 
Funds (Zuschüsse zu landwirtschaftl. 
Alterskassen) (bsa01)
Education Allowance (Bildungspaket) 
(bched_s)
Other social assistance (Sozialgeld) 
(bsaot_s)
One- off payment for unemployed and 
social assistance recipients (bsaxp_s)

Heating bonus (Heizkostenzuschuss) 
(bhtxp_s)
Non-means-tested benefits (ils_bennt)

Source

Federal Employment Agency

Destatis

Destatis

-

Federal Ministry for Family Affairs, Senior Citizens, Women and Youth

-

Federal Employment Agency

Nationals Accounts/Destatis

Destatis

-

-

Federal Employment Agency

-

-

Child benefits (Kindergeld) (bch00_s)

Federal Employment Agency

Maternity leave (bmact_s)

Federal Ministry of Labour and Social Affairs

Parental leave (bplct_s)

Destatis

Unemployment benefits I (ALG I) 
(bunct_s)
Sickness Benefits (Krankengeld der GKV, 
prvt. Pflegezusatz- oder 
Krankentagegeldversicherung) (bhl_s)

Federal Employment Agency

National Association of Statutory Health Insurance Funds

Comments

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

115Continued...

Long-term care benefits from pension 
insurance (Pflegegeld) (pdica)
Benefits for business start-ups 
(Förderung der Existenzgründung: Ich-
AG, Überbrückungsgeld) (bunot)
Benefits for re-training 
(Umschulungszuschüsse) (buntr)
Severance pay (Kurzarbeitergeld, 
Schlechtwettergeld, Wintergeld, 
Konkursausfallgeld, Umschulungsgeld, 
u.ä.) (ysv)
Benefits for early retirement 
(Vorruhestandsgeld) (byr)
Care benefits for children (Pflegegeld für 
Pflegekinder, Pflegegeld für 
pflegebedürftige Kinder nach SGB XI, 
Betreuungsgeld) (bfaot)
Unemployment benefits: lump-sum 
(bunls)
Simulated wage compensation 
(Kurzarbeitergeld) (bwkmcee_s)
Child bonus (covid-19 policy) (bchls_s)

Lump-sum energy transfer 
(Energiepreispauschale) (blsxp_s)
Lump-sum energy transfer (for students) 
(blsxpsd_s)

Source
National Association of Statutory Health Insurance Funds

Comments
-

Federal Employment Agency

-

Federal Employment Agency

Deutsche Rentenversicherung

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

116Table A3.6. Benefits - Annual amounts (million)

Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)

2021

2022

2023

2024

2021

2022

2023

2024 2021 2022 2023 2024

2021

2022

2023

2024 2021 2022 2023 2024

Pensions (ils_pen)

Old-age pension (poa00)

Old-age pension for civil servants (poacs)

Pension for employees in public service 
(Rente der Zusatzversorgungskassen des 
öffentlichen Dienstes) (poapu)

Pension schemes for self-employed, 
freelancers, and farmers (Rente 
berufsständischer Versorgungswerke, 
landwirtschaftlicher Alterskassen und 
Landabgaberenten) and Supplements to 
old-age pension insurance contributions 
for farmers (Zuschüsse der 
landwirtschaftlichen Alterskassen)
 (poaps)
Old-age pension of statutory pension 
insurance (poass)
Old-age pension from a foreign country 
(Auslandsrente) (poaab)
Pensions for reduced ability to work 
(pdi00)
Pensions for disability to work for civil 
servants (pdiot)
Widow(er)'s pension (psuwd)

Orphan's pension (psuor)

Benefits for war victims and burden 
sharing (pdiwr)
Disability pension from stat. acc. 
Insurance (Rente der gesetzlichen 
Unfallversicherung); NOTE: we simulate 
the pension for individuals aged under 65 
(pdiss_s)
Disability pensions for those aged over 
65, that include the Disability pension 
from stat. acc. Insurance (Rente der 
gesetzlichen Unfallversicherung) and the 
Long-term care benefit from the pension 
insurance (Pflegegeld) (poadi)

N

N

N

N

N

N

N

N

N

N

N

Y

N

19,439

21,124

22,398

23,133

19,439

19,439

19,439

19,439

64,729

65,340

68,962

72,479

64,729

64,729

64,729

64,729

1.00

1.00

1.09

1.01

1.15

1.07

1.19

1.12

25,060

26,343

26,645

NaN 0.78

66,300

68,893

71,941

NaN 0.98

0.80

0.95

0.84 NaN

0.96 NaN

7,392

8,032

8,517

8,796

7,392

7,392

7,392

7,392

1.00

1.09

1.15

1.19

12,841

13,160

NaN

NaN 0.58

0.61 NaN NaN

3,937

4,278

4,536

4,685

3,937

3,937

3,937

3,937

1.00

1.09

1.15

1.19

NaN

NaN

NaN

NaN NaN NaN NaN NaN

258,308 272,570 282,508 285,239 258,308 258,308 258,308 258,308

1.00

1.06

1.09

1.10 243,586 253,692 268,980

NaN 1.06

1.07

1.05 NaN

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

5,543

5,837

NaN

NaN 0.00

0.00 NaN NaN

15,501

16,357

16,954

17,117

15,501

15,501

15,501

15,501

1.00

1.06

1.09

1.10

19,038

20,041

20,667

NaN 0.81

0.82

0.82 NaN

2,228

2,421

2,567

2,651

2,228

2,228

2,228

2,228

1.00

1.09

1.15

1.19

NaN

NaN

NaN

NaN NaN NaN NaN NaN

40,703

42,950

44,516

44,946

40,703

40,703

40,703

40,703

652

14

688

15

713

16

720

16

652

14

652

14

652

14

652

14

1.00

1.00

1.00

1.06

1.06

1.09

1.09

1.09

1.15

1.10

1.10

1.19

NaN

NaN

NaN

NaN

NaN

248

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

NaN NaN 0.06 NaN NaN

2,721

2,722

2,820

2,944

1,472

1,472

1,472

1,472

1.85

1.85

1.92

2.00

5,903

5,911

6,052

NaN 0.46

0.46

0.47 NaN

1,904

2,069

2,193

2,265

1,904

1,904

1,904

1,904

1.00

1.09

1.15

1.19

NaN

NaN

NaN

NaN NaN NaN NaN NaN

117Benefits for war victims 
(Lastenausgleichsrente, Rente der 
Kriegsopferversorgung, SED-Opferrente) 
(poawr)
Means-tested benefits (ils_benmt)

Unemployment benefits II and social 
benefits (ALG II und Sozialgeld) (bunnc_s)

General social assistance (Sozialhilfe) 
(bsa00_s)
Old-age social assistance 
(Grundsicherung im Alter) (bsaoa_s)
Advances on alimony payments 
(Unterhaltsvorschuss) (bsaam)
Advances on alimony payments 
(Unterhaltsvorschuss) (bcham)
Benefits from non-profitable charity 
organizations (Geldleistungen von 
Wohlfahrtsorganisationen, z.B. AWO) 
(bsapu)
Additional child benefits (Kinderzuschlag) 
(bchot_s)
Education benefits (BaFöG) (bed_s)

Main housing benefits (Wohngeld) 
(bho00_s)
Allowance to the Agricultural Pension 
Funds (Zuschüsse zu landwirtschaftl. 
Alterskassen) (bsa01)
Education Allowance (Bildungspaket) 
(bched_s)
Other social assistance (Sozialgeld) 
(bsaot_s)
One- off payment for unemployed and 
social assistance recipients (bsaxp_s)

Heating bonus (Heizkostenzuschuss) 
(bhtxp_s)
Non-means-tested benefits (ils_bennt)

Child benefits (Kindergeld) (bch00_s)

Maternity leave (bmact_s)

Parental leave (bplct_s)

Unemployment benefits I (ALG I) 
(bunct_s)

Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)
N

2021
165

2022
179

2023
190

2024
196

2021
165

2022
165

2023
165

2024 2021 2022 2023 2024
1.19
1.09

1.15

1.00

165

2021
NaN

2022
NaN

2023
NaN

2024 2021 2022 2023 2024
NaN NaN NaN NaN NaN

Y

Y

Y

N

N

N

Y

Y

Y

N

Y

Y

Y

Y

Y

Y

Y

Y

25,187

26,144

27,614

31,764

14,043

14,043

14,043

14,043

1.79

1.86

1.97

2.26

25,607

25,979

30,605

NaN 0.98

1.01

0.90 NaN

661

693

648

784

2,936

2,936

2,936

2,936

0.23

0.24

0.22

0.27

1,273

1,369

1,581

NaN 0.52

0.51

0.41 NaN

4,911

5,062

5,430

6,384

5,284

5,284

5,284

5,284

0.93

0.96

1.03

1.21

8,150

8,809

10,087

NaN 0.60

0.57

0.54 NaN

1,155

1,255

1,331

1,374

1,155

1,155

1,155

1,155

1.00

1.09

1.15

1.19

NaN

NaN

NaN

NaN NaN NaN NaN NaN

1,155

1,255

1,331

1,374

1,155

1,155

1,155

1,155

1.00

1.09

1.15

1.19

2,012

2,007

2,178

NaN 0.57

0.63

0.61 NaN

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

2,839

2,674

4,272

5,617

2,009

2,009

2,009

2,009

1.41

1.33

2.13

2.80

1,269

1,287

1,871

NaN 2.24

2.08

2.28 NaN

5,305

2,614

5,171

2,381

6,071

8,793

5,737

7,362

4,421

4,421

4,421

4,421

813

813

813

813

1.20

3.21

1.17

1.37

2.93 10.81

1.30

9.05

2,895

1,406

2,975

1,825

3,389

4,317

NaN 1.83

NaN 1.86

1.74

1.30

1.79 NaN

2.04 NaN

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

391

387

499

594

764

764

764

764

0.51

0.51

0.65

0.78

NaN

NaN

NaN

NaN NaN NaN NaN NaN

899

905

1,015

1,462

4,107

4,107

4,107

4,107

0.22

0.22

0.25

0.36

825

1,092

1,289

NaN 1.09

0.83

0.79 NaN

NaN

1,145

NaN

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN

323

482

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

39,875

39,875

45,330

45,330

46,026

46,026

46,026

46,026

732

2,712

8,657

729

2,715

9,399

728

731

2,732

2,754

9,962

10,289

510

7,380

9,102

510

7,380

9,102

510

7,380

9,102

510

7,380

9,102

0.87

1.44

0.37

0.95

0.87

1.43

0.37

1.03

0.98

1.43

0.37

1.09

0.98

1.43

0.37

1.13

47,626

47,920

54,229

NaN 0.84

761

706

665

NaN 0.96

7,462

7,640

7,444

NaN 0.36

19,460

16,588

18,799

NaN 0.44

0.83

1.03

0.36

0.57

0.84 NaN

1.10 NaN

0.37 NaN

0.53 NaN

118Sickness Benefits (Krankengeld der GKV, 
prvt. Pflegezusatz- oder 
Krankentagegeldversicherung) (bhl_s)
Long-term care benefits from pension 
insurance (Pflegegeld) (pdica)
Benefits for business start-ups 
(Förderung der Existenzgründung: Ich-
AG, Überbrückungsgeld) (bunot)
Benefits for re-training 
(Umschulungszuschüsse) (buntr)
Severance pay (Kurzarbeitergeld, 
Schlechtwettergeld, Wintergeld, 
Konkursausfallgeld, Umschulungsgeld, 
u.ä.) (ysv)
Benefits for early retirement 
(Vorruhestandsgeld) (byr)
Care benefits for children (Pflegegeld für 
Pflegekinder, Pflegegeld für 
pflegebedürftige Kinder nach SGB XI, 
Betreuungsgeld) (bfaot)
Unemployment benefits: lump-sum 
(bunls)
Simulated wage compensation 
(Kurzarbeitergeld) (bwkmcee_s)
Child bonus (covid-19 policy) (bchls_s)

Lump-sum energy transfer 
(Energiepreispauschale) (blsxp_s)
Lump-sum energy transfer (for students) 
(blsxpsd_s)

Simulated

EUROMOD

SILC

Ratio

External

Ratio

(Y / N)
Y

2021
9,564

2022
9,646

2023
10,052

2024
10,636

2021
7,167

2022
7,167

2023
7,167

2024 2021 2022 2023 2024
1.48
1.35
7,167

1.40

1.33

2021
16,610

2022
17,950

2023
19,110

2024 2021 2022 2023 2024
0.53 NaN
0.54
NaN 0.58

N

N

N

N

N

N

N

Y

Y

Y

Y

1,454

1,580

1,675

1,730

1,454

1,454

1,454

1,454

1.00

1.09

1.15

1.19

13,920

14,920

16,180

NaN 0.10

0.11

0.10 NaN

139

151

160

165

139

139

139

139

1.00

1.09

1.15

1.19

238

232

270

NaN 0.58

0.65

0.59 NaN

2,369

2,574

2,729

2,819

2,369

2,369

2,369

2,369

1.00

1.09

1.15

1.19

NaN

NaN

NaN

NaN NaN NaN NaN NaN

10,216

11,102

11,771

12,157

10,216

10,216

10,216

10,216

1.00

1.09

1.15

1.19

12,120

2,272

500

NaN 0.84

4.89 23.54 NaN

0

0

0

0

0

0

0

0

0.00

0.00

0.00

0.00

NaN

NaN

NaN

NaN NaN NaN NaN NaN

5,131

5,576

5,912

6,106

5,131

5,131

5,131

5,131

1.00

1.09

1.15

1.19

NaN

NaN

NaN

NaN NaN NaN NaN NaN

4,443

4,829

5,120

5,288

4,443

4,443

4,443

4,443

1.00

1.09

1.15

1.19

NaN

NaN

NaN

NaN NaN NaN NaN NaN

0

0

0

0

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

2,268

1,512

NaN 17,965

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN NaN NaN NaN NaN

NaN

NaN

476

NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

NaN

NaN

NaN

NaN NaN NaN NaN NaN

119Table A3.7. Distribution of equivalised disposable income

EUROMOD

External

Ratio

2021
3.64
5.10
6.13
7.10
8.14
9.25
10.56
12.20
14.70
23.18
24,698
27,473
29.12
4.33

2022
3.68
5.11
6.15
7.13
8.16
9.28
10.57
12.18
14.67
23.07
26,092
29,005
28.94
4.29

2023
3.75
5.17
6.19
7.10
8.10
9.22
10.52
12.15
14.66
23.15
27,308
30,528
28.84
4.24

2024
3.76
5.15
6.15
7.03
8.03
9.16
10.48
12.14
14.67
23.44
28,340
31,848
29.17
4.28

2021
3.30
5.30
6.30
7.20
8.30
9.30
10.50
12.10
14.50
23.20
24,925
28,569
29.00
4.38

2022
3.30
5.30
6.30
7.20
8.20
9.20
10.40
12.00
14.40
23.70
26,274
30,308
29.40
4.44

2023
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN

2024
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN

2021
1.10
0.96
0.97
0.99
0.98
1.00
1.01
1.01
1.01
1.00
0.99
0.96
1.00
0.99

2022
1.12
0.96
0.98
0.99
0.99
1.01
1.02
1.02
1.02
0.97
0.99
0.96
0.98
0.97

2023
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN

2024
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN
NaN

Decile 1
Decile 2
Decile 3
Decile 4
Decile 5
Decile 6
Decile 7
Decile 8
Decile 9
Decile 10
Median
Mean
Gini
S80/20

120Table A3.8. At-risk-of-poverty rates (%) by sex and age

40% median HDI by sex
Total
Males
Females
50% median HDI by sex
Total
Males
Females
60% median HDI by sex
Total
Males
Females
70% median HDI by sex
Total
Males
Females
60% median HDI by age group
0-15 years
16-24 years
25-49 years
50-64 years
65+ years

EUROMOD

External

Ratio

2021

2022

2023

2024

2021

2022

2023

2024

2021

2022

2023

2024

3.18
3.36
3.00

8.57
8.40
8.74

15.98
15.46
16.49

24.29
23.44
25.13

14.46
24.58
12.98
14.05
19.88

2.98
3.15
2.83

8.56
8.42
8.69

15.89
15.45
16.31

24.35
23.53
25.15

15.23
24.63
13.18
13.71
18.95

2.62
2.78
2.46

7.75
7.72
7.78

14.95
14.59
15.29

23.34
22.54
24.13

12.16
22.52
11.74
13.59
19.88

2.26
2.34
2.18

7.44
7.30
7.57

14.76
14.36
15.14

23.28
22.41
24.13

11.04
21.62
10.90
13.19
21.84

4.40
4.30
4.60

8.50
8.00
8.90

14.80
14.00
15.50

22.90
21.80
23.90

14.70
22.10
12.00
12.30
18.30

4.40
4.20
4.50

8.30
7.90
8.70

14.40
13.70
15.10

22.70
21.60
23.80

13.80
22.20
11.90
11.30
18.40

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN
NaN
NaN

0.72
0.78
0.65

1.01
1.05
0.98

1.08
1.10
1.06

1.06
1.08
1.05

0.98
1.11
1.08
1.14
1.09

0.68
0.75
0.63

1.03
1.07
1.00

1.10
1.13
1.08

1.07
1.09
1.06

1.10
1.11
1.11
1.21
1.03

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN

NaN
NaN
NaN
NaN
NaN

121Table A3.9. Consumption taxes (non-calibrated) - Annual amounts (millions)

Simulated

EUROMOD

External

Ratio

(Y / N)

2021

2022

2023

2024

2021

2022

2023

2024

2021

2022

2023

2024

Consumption-tax-related statistics 
non-calibrated (ils_extstat_ittncal)
Aggregate expenditures non-
calibrated 
(ils_extstat_ittncal_il_itt_expnc)
01 Food and non-alcoholic beverages 
(il_x01)
02 Alcoholic beverages, tobacco, etc. 
(il_x02)
03 Clothing and footwear (il_x03)
04 Housing, water and fuel (exc. 
imputed rent) (il_x04)
05 Furnishings, household 
equipment, etc. (il_x05)
06 Health (il_x06)
07 Transport (il_x07)
08 Communications (il_x08)
09 Recreation and culture (il_x09)
10 Education (il_x10)
11 Hotels and restaurants (il_x11)
12 Miscellaneous good and services 
(il_x12)
Revenue from indirect taxes (non 
calibrated) 
(ils_extstat_ittncal_il_itt_revnc)
VAT Total Revenue (il_tva)
Excises Total Revenue (il_tx)
Total excises (non calibrated) 
(ils_extstat_ittncal_il_itt_excnc)
Revenues Excises 0211 - Spirits 
(il_tx0211)
Revenues Excises 0213 - Beer 
(il_tx0213)

Y

Y

Y
Y

Y

Y
Y
Y
Y
Y
Y
Y

Y
Y

Y

Y

186,396

197,009

207,658

216,611

200,574

216,357

216,357

216,357

0.93

0.91

0.96

1.00

26,600

28,111

29,618

30,920

60,732

58,870

58,870

58,870

0.44

0.48

0.50

0.53

68,163
250,786

71,926
265,361

75,909
279,735

79,360
291,394

65,655
261,392

76,441
282,230

76,441
282,230

76,441
282,230

1.04
0.96

0.94
0.94

0.99
0.99

1.04
1.03

65,979

69,649

73,328

76,595

120,215

130,085

130,085

130,085

0.55

0.54

0.56

0.59

62,993
211,277
42,852
153,620
3,303
76,291
170,496

66,509
222,977
45,282
162,127
3,474
80,539
179,835

69,769
235,189
47,828
170,669
3,685
84,774
189,541

72,765
246,239
49,939
178,115
3,868
88,488
198,354

96,115
224,030
39,924
162,014
14,506
65,797
224,607

98,899
253,929
41,236
187,327
14,988
101,028
235,981

98,899
253,929
41,236
187,327
14,988
101,028
235,981

98,899
253,929
41,236
187,327
14,988
101,028
235,981

0.66
0.94
1.07
0.95
0.23
1.16
0.76

0.67
0.88
1.10
0.87
0.23
0.80
0.76

0.71
0.93
1.16
0.91
0.25
0.84
0.80

0.74
0.97
1.21
0.95
0.26
0.88
0.84

131,976
39,469

139,377
33,726

144,307
36,607

159,881
37,303

260,333
61,541

289,641
NaN

286,587
NaN

NaN
NaN

0.51
0.64

0.48
NaN

0.50
NaN

NaN
NaN

0

0

0

0

0

0

0

0

2,089

NaN

NaN

NaN

0.00

NaN

NaN

NaN

586

NaN

NaN

NaN

0.00

NaN

NaN

NaN

122 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues Excises 022 - Tobacco 
(il_tx022)
Revenues Excises 045 - Energy 
(electricity, natural gas, coal-coke ) 
(il_tx045)
Revenues Excises 0451 - Electricity 
(il_tx0451)
Revenues Excises All Energy 
(il_tx045_072)

Simulated

(Y / N)
Y

Y

Y

Y

EUROMOD

External

Ratio

2021
5,474

2022
5,861

2023
6,152

2024
6,237

2021
14,714

2022
NaN

2023
NaN

2024
NaN

2021
0.37

2022
NaN

2023
NaN

2024
NaN

6,293

5,173

4,739

4,882

9,712

NaN

NaN

NaN

0.65

NaN

NaN

NaN

2,385

2,409

2,066

2,207

6,691

NaN

NaN

NaN

0.36

NaN

NaN

NaN

32,640

26,488

29,120

29,706

43,812

NaN

NaN

NaN

0.75

NaN

NaN

NaN

123Table A3.10. Consumption taxes (calibrated) - Annual amounts (millions)

Simulated

EUROMOD

External

Ratio

(Y / N)

2021

2022

2023

2024

2021

2022

2023

2024

2021

2022

2023

2024

Consumption-tax-related statistics 
calibrated (ils_extstat_ittcal)
Revenue from indirect taxes 
(calibrated) (il_itt_revc)
VAT Total Revenue (il_tva_na)
Excises Total Revenue (il_tx_na)
Total excises (calibrated) 
(il_itt_excc)
Revenues Excises 0211 - Spirits 
(il_tx0211_na)
Revenues Excises 0213 - Beer 
(il_tx0213_na)
Revenues Excises 022 - Tobacco 
(il_tx022_na)
Revenues Excises 045 - Energy 
(electricity, natural gas, coal-coke ) 
(il_tx045_na)
Revenues Excises 0451 - Electricity 
(il_tx0451_na)
Revenues Excises All Energy 
(il_tx045_072_na)

Y
Y

Y

Y

Y

Y

Y

Y

153,928
50,088

170,583
44,933

178,156
48,777

193,250
48,647

260,333
61,541

289,641
NaN

286,587
NaN

NaN
NaN

0.59
0.81

0.59
NaN

0.62
NaN

NaN
NaN

0

0

0

0

0

0

0

0

2,089

NaN

NaN

NaN

0.00

NaN

NaN

NaN

586

NaN

NaN

NaN

0.00

NaN

NaN

NaN

12,497

12,274

12,970

12,898

14,714

NaN

NaN

NaN

0.85

NaN

NaN

NaN

6,559

5,501

5,072

5,135

9,712

NaN

NaN

NaN

0.68

NaN

NaN

NaN

2,486

2,562

2,211

2,321

6,691

NaN

NaN

NaN

0.37

NaN

NaN

NaN

34,497

29,776

32,991

32,938

43,812

NaN

NaN

NaN

0.79

NaN

NaN

NaN

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