Why pensioners have to pay 4.8 percent care contribution in July

Pensioners will have to pay a one-time 4.8 percent long-term care contribution in July. This is due to the increase in the contribution rate for long-term care insurance at the beginning of the year. It was previously 3.4 percent and increased to 3.6 percent on January 1, 2025.

However, pensioners have not had to pay this increase so far. Instead, the federal regulation stipulates that they must make a six-month back payment in July. Therefore, a one-time 3.6 percent plus 1.2 percent (0.2 percent back payment per month) is due. Starting in August, pensioners will then pay the regular contribution rate of 3.6 percent.

A pensioner with a gross monthly pension of €1,000 will therefore have to pay €14 more in social security contributions in July than usual. A pensioner with a pension of €2,000 will have to pay €28 more. However, most pensioners will hardly notice this additional burden because their pensions will increase at the same time as the one-time back payment. They will increase nationwide by 3.74 percent on July 1. Overall, therefore, pensioners will still receive more money than in the previous month.

But why is the complicated retroactive payment of the nursing care contribution even necessary? In short, it apparently couldn't be done any faster. The German Federal Pension Insurance (DRV Bund) responded to an RND inquiry: "Because the contribution rate for nursing care insurance was increased at very short notice, there was not enough time to implement the required automation process." The legislature created a special regulation for this reason.

The timing of July was deliberately chosen: “The advantage is that both adjustments – the increase in pensions by 3.74 percent and the new nursing care contribution rate – can be implemented in one step,” explains a spokeswoman.

The Federal Association of Pension Consultants, however, views the approach critically and speaks of "hidden injustices." It is disadvantageous for pensioners that the deferred 1.2 percent long-term care contribution is being levied on the pension, which will be increased on July 1, 2025, because this would lead to a disproportionate back payment.

In absolute terms, however, we're talking about amounts in cents. The German Pension Insurance calculates: "For a monthly pension of 1,000 euros, for example, this means a one-time deviation of 45 cents gross."

Another detail bothers pension advisors: All pensioners pay the one-time surcharge of 1.2 percent – ​​including those who, for example, only retired in June. New pensioners, however, would not have benefited from the deferral in the previous five months. A new pensioner receiving a gross pension of €2,000 starting this June would therefore actually have to pay €20 less in long-term care contributions than the German Pension Insurance actually withheld. "This is objectively unjustified," says Thomas Neumann, President of the Federal Association of Pension Advisors.

Dresden-based pension consultant Christian Lindner goes even further and advises pensioners to file an objection in such cases. If many pensioners took this step, it would represent an enormous administrative burden for the German Pension Insurance Association. The original plan of the federal government and the pension insurance association to implement the changeover as simply as possible would be dashed by a flood of objections. "At that point, it would hardly be possible to speak of a low-bureaucracy implementation," the association admits.

What may be small amounts for individual pensioners adds up to an eight-figure sum for the nursing care funds. The Federal Association of Pension Consultants has estimated that the delayed implementation of the nursing care contribution increase alone could result in up to 15 million euros in additional revenue.

However, if one compares this amount with the nursing care insurance deficit of 1.54 billion euros at the end of 2024, it becomes clear that even the millions in special revenue for the ailing funds is at best a drop in the ocean.