Overview: What the care reform aims to do
Health Minister Nina Warken has presented a comprehensive care reform package designed to close a deepening financing gap in the social long-term care insurance. The ministry projects a shortfall of more than 20 billion euros by 2030 and around 22.5 billion euros over the next two years. The reform follows a clear pattern: generate additional revenue from selected groups while cutting or delaying some benefits for people who need care, especially residents of nursing homes. Key policy levers include higher contributions from high earners, a larger surcharge for people without children, employer contributions on mini-jobs, delayed nursing home subsidy steps, stricter care grade rules and encouragement of private provision and prevention.
Who will pay more: high earners, childless people, employers and mini-jobs
Higher contributions for high earners
One major revenue measure is an exceptional increase of the contribution assessment ceiling so that a larger share of high incomes becomes subject to care insurance contributions. The ministry estimates that this change could bring roughly 1.6 to 1.7 billion euros in additional revenue for the care funds each year. Officials indicate the adjustment could take effect at the start of 2027 and may make care contributions several hundred euros more expensive per year for well-paid employees and their employers.
Higher surcharge for childless people
The reform would raise the existing surcharge for people without children by 0.1 percentage points to a total of 0.7 contribution points. This targeted increase is estimated to yield about 1.1 billion euros in additional revenue as early as next year. The measure is presented as a way to broaden the financing base, but it also raises questions about fairness and the long-term social effects of targeting specific life choices.
Employers and mini-jobs
Another change expands the obligation of employers to pay care contributions for marginal part-time employment (mini-jobs). That step is expected to create additional employer expenses of around 2 billion euros in the first year, rising to roughly 2.1 billion euros by 2030. The policy aims to distribute costs more broadly across the labor market, but it will increase labor costs for small-scale employment and could affect hiring or pay decisions.
- Contribution assessment ceiling increase: ~1.6–1.7 billion euros/year
- Childless surcharge rise: ~1.1 billion euros (next year)
- Employer contributions for mini-jobs: ~2.0 billion (first year), ~2.1 billion by 2030
Impact on nursing home residents and care costs
Delayed subsidy schedule for nursing home stays
The reform keeps the system of graduated subsidies that reduce residents’ share of pure care costs, but shifts the timing of those relief steps six months later. Under current rules residents are progressively relieved at 15% in the first year, 30% after 12 months, 50% after 24 months and 75% after 36 months. The proposed schedule would move the higher relief levels to 18, 36 and 54 months. Analysts estimate that the change would raise average out-of-pocket costs for nursing home residents by about 160 euros per month and could add up to roughly 20,000 euros in extra personal payments over a five-year stay. At the same time the care funds would see immediate relief of billions: about 2.6 billion euros next year, while social assistance costs for local governments could rise by roughly 1 billion euros.
Loss of entlastungsbetrag and stricter care grades
The reform also reduces or redirects certain benefits for people with lower care needs. People in care grade 1 would lose the monthly relief sum of 131 euros that many used for household help or everyday assistance. Newly assessed people entering care grades 2 or 3 would receive only half of that relief for the first three months, paired with stronger advice and prevention offerings. In addition, the rules for assigning care grades will be tightened and many awards will be temporary, with the aim of encouraging rehabilitation and reclassification. These measures are projected to generate significant savings—some 1.3 billion euros in the near term and rising to several billion annually by 2030—yet critics warn they may reduce access to needed services and increase poverty risk among people in need of care.
Effects on families and family caregivers
Removal of the 100,000-euro exemption for adult children
The draft foresees reversing the rule that protected adult children with annual incomes below a high threshold from being held liable for their parents’ care costs. Repealing the 100,000-euro exemption would allow municipalities to demand more contributions from children with far lower incomes, reducing social assistance payments but shifting costs onto families. This change is politically controversial and raises concerns about the so-called sandwich generation that cares for children and aging parents simultaneously.
Reduced pension credits and new support services for caregivers
To save money the reform plans to lower the pension insurance credits that caregiving relatives receive for time spent providing care. That reduces long-term pension entitlements in exchange for immediate budget relief: the care funds would save about 1.8 billion euros next year and around 2.1 billion euros by 2030. The ministry pairs this cut with promises of new practical relief—short-term replacement services or a dedicated emergency service to help when family carers fall ill or need a break—but experts warn that lower pension entitlements cannot easily be made up later and may leave former carers with reduced retirement security.
Structural changes, prevention and private provision
Staffing, wages and payment rules
The government intends to limit automatic pass-throughs of rising personnel costs to the care funds. Future staff cost increases would be tied to general wage developments rather than automatically covered, and for a transitional period the requirement that only facilities paying tariff wages bill the care insurance might be suspended. The aim is to push employers to negotiate harder in wage talks and contain premium inflation, but trade unions and provider groups warn this could create downward pressure on pay and make recruitment and retention harder in an already tight labor market.
Lower building standards to reduce place costs
To curb investment and rent costs for care places, the ministry proposes easing some construction and planning standards for care homes. Lowering requirements for room sizes or amenities is intended to keep new places affordable, but opponents worry about negative effects on living quality and community life in facilities if comfort and shared spaces are scaled back for cost reasons.
Private long-term care insurance and tax incentives
Another pillar of the reform is stronger promotion of private care provision. The ministry wants more generous tax treatment of private long-term care insurance contributions by making them deductible as a form of precautionary savings. The idea is to strengthen private provision as a complementary pillar to statutory insurance, but it remains contested whether such incentives would be politically feasible or socially effective at scale.
Focus on prevention and rehabilitation
Warken emphasizes prevention and rehabilitation as alternatives to long-term dependency. The reform reallocates funds away from some cash benefits toward counseling, prevention and rehab services, expecting savings from fewer long-term entitlements. For example, changes to entitlements and stricter care grade rules are expected to produce meaningful short-term savings. Critics, however, warn that prevention programs are unevenly available and that replacing cash with services can be a disguised cost-cutting measure if the services are insufficient or inaccessible locally.
Political debate, risks and next steps
The reform has produced a sharp political and social debate. Supporters argue the package is necessary to stabilize the insurance without repeatedly raising the overall contribution rate or substantially expanding federal spending. Opponents warn that the plan shifts costs to people in care, their families and local governments, increasing the risk of poverty in old age and placing new burdens on municipalities through higher social assistance. Within the governing coalition there are disagreements about how far to go on family liability and how to balance market-based incentives with social protection. The parliamentary process will be decisive: amendments may change key elements, and implementation details will determine whether the measures achieve durable financial stability or mainly redistribute hardship.
What to watch next: the exact timing and size of contribution changes, the rules on family liability, the implementation of delayed nursing-home subsidies, safeguards for low-income care recipients, and whether promised prevention and replacement services are funded and available everywhere. The reform raises core questions about solidarity, responsibility and how a society shares the costs of long-term care—questions that will shape public debate in the months ahead.
