How to get financial support and save money in Germany in 2021

The Covid-19 pandemic has not only changed the way we live, but also led to a period of severe economic uncertainty. Thankfully, the German government is offering extensive financial support not only for affected companies but also for employees and self-employed people.

How to get financial support and save money in Germany in 2021
Photo: Getty Images

But if you’re an international resident, you may be unsure where to get advice on the support measures that are relevant to you. The Local has partnered with ottonova – Germany's first fully digital health insurer – to offer you a guide to the state support you may be entitled to and how you can take care of your finances in turbulent times like these. 

Federal Finance Minister Olaf Scholz has said “this crisis is about standing together in solidarity” – and a wide range of support is available for those in need.
Government aid is available to business owners and freelancers 
The aid announced is available to self-employed small business owners and freelancers. Providing that you can prove your income in November, December or January was less than during the same period a year before, you can apply to receive 75 percent of the difference via the ‘Novemberhilfe’ website. 
No tax return is needed, and you don’t need to be a German citizen to apply – it’s enough to be paying tax into the system and have a ‘Steuernummer’, or tax number. 
If you own a company, you're able to apply for loans of up to 25 percent of the previous year’s turnover from the state-owned KFW bank via their website. These loans are fully backed by the federal government and requests can be made for up to €800,000. Fixed at three percent interest, they are to be repaid over ten years, with no payments required for the first two years. Business owners can apply for these loans until the middle of next year.
As a self-employed entrepreneur, you're also able to access up to €5,000 in direct help from the KfW via the same website. Furthermore, you'll be paying less for electricity, with environmental levies being abolished. Your pension funds will also be protected, with the government maintaining contribution levels through their borrowing. 
Photo: Getty Images
Tax support for working from home
The German government is also ready to provide support for millions of people in terms of the personal tax burden. If you're working from home, the government is planning a tax rebate of up to €600 to help offset higher costs for heating, electricity and other home office costs. Make sure you've kept relevant documentation, including bills and receipts from office supply stores, for example.  
While it’s the German tax system that has allowed the government to give such generous aid during the pandemic, many international residents may be paying far more in taxes than they need to. Fortunately, a variety of apps allow you to lodge a tax return in less than an hour, with minimal fuss. This option may suit you if you face both time and language barriers to sitting down with an accountant. 
Check your monthly health insurance costs
Changes to federal law in recent years, along with the coronavirus crisis, could leave a €16 billion gap in public health insurance balances for 2021. While part of this hole will be plugged by a federal grant and contributions from company reserves, customers will still have to pay more each month to cover the remaining costs of up to €3 billion. 
Unlike ottonova, the vast majority of health insurers in Germany will be raising their premiums next year. Even before Covid-19, studies had warned that premiums would need to rise in the coming years to cover Germany's ageing population.

Both private and public health insurers will raise their premiums – but ottonova has announced a price freeze until 2022, making it the only German private insurer to make that promise at this time. As a completely digital insurer without a bricks and mortar presence and the associated overheads, the company is able to pass on savings to their customers.  

In addition, most costs for private health insurance can be deducted from your tax returns – unlike public health insurance costs. It’s worth considering changing to private health insurance if you want to deduct these costs from your tax report and benefit from excellent medical coverage. If you're an expat, you don't need to pay into the insurer's retirement balance, giving you even greater potential for savings – starting at €165 per month.
Most public health insurers – and also some private ones – only cover a certain amount of your dental treatments. As you plan financially for the year ahead, it's worth checking exactly what you're covered for with your health insurance and what your options are. For example, adding a dental insurance top-up to your coverage could make sense in order to head off any expensive surprises. 
For members


Why more than 20 million people in Germany face higher health insurance costs

Several German health insurance companies have raised their rates this year, pushing up the costs for customers.

Many people are facing higher health insurance contributions this year.
Many people are facing higher health insurance contributions this year. Photo: picture alliance / dpa | Jan Woitas

According to a study by the comparison portal Check24, around 21 million people with statutory health insurance (gesetzliche Krankenversicherung or GKV) have had to pay higher contributions since the beginning of the year after several organisations raised their additional contributions. 

A total of 19 of the 97 statutory health insurance providers in Germany have increased their additional contributions, the comparison portal found.

It means more than a quarter of the 73 million people with statutory health insurance in Germany have to pay higher additional contributions. 

According to Check24, the higher additional contributions can cost an insured person in the most expensive case an extra €261 per year.

Among those to have raised their additional contributions include AOK Baden-Württemberg and AOK Bayern, which have both increased the additional contributions from 1.10 percent to 1.30 percent. Check24 has published the full list of additional contributions here.

Customers affected receive a letter in the post letting them know when their contributions are increasing. Health insurance providers justify raising their rates by pointing out rising costs in the health and care system. The pandemic has also put significant strain on providers. 

READ ALSO: How to make the most of reward schemes on your German health insurance

A total of 67 health insurance providers are keeping their individual additional contribution the same. And as many as 11 health insurance funds lowered their contributions – although most of these already had comparatively high rates.

In 2021, Techniker Krankenkasse (TK), the largest statutory health insurance fund in Germany with around 8.2 million members, raised its additional contribution significantly.

The contribution went up to 1.2 percent from 0.7 percent. Average earners saw additional monthly costs of about €10 extra, while self-employed people had to pay up to €288 more per year. 

TK has not raised its rates this year. 

Can you switch health insurance?

If your health insurance company increases the additional contribution, those insured have a special right of termination until January 31st, 2022.

They can apply for the change up until this date, and they will then become a member of the new health insurance provider from April 1st after the statutory two month change-over period has expired.

Insured people also have the right to change their statutory health insurance fund every 12 months.

The cost of public health insurance in Germany is a fixed salary percentage of 14.6 percent, while the reduced contribution rate for employees without entitlement to sick pay is 14.0 per cent.

Beyond that, however, health insurance providers set an additional contribution, which can currently be up to 2.5 percent.

The contribution assessment ceiling for statutory health insurance (GKV) – up to which contributions are levied – remains unchanged at €58,050 per year in 2022, as in the previous year.

Check24 said that switching providers can save employees up to €624 per year depending on their income.

Self-employed people pay both the employee and employer contribution and can therefore save up to €1,248 euros per year by switching, the analysis found. 

However in a representative YouGov survey only 11 percent of respondents in Germany said they had recently changed their insurance provider or would do so in the foreseeable future.

Most of the benefits provided by statutory health insurance organisations are identical.

READ ALSO: EXPLAINED: The three new services covered by German health insurance

However, there are some differences in the voluntary benefits, including dental health (professional dental cleaning and discounted dentures), vaccinations (flu vaccinations for under 60s and travel vaccinations), various cancer screening examinations and osteopathic treatments.

“In addition to the financial relief, insured people can also secure higher subsidies for professional dental cleaning or other additional benefits by switching,” said Dr Daniel Güssow, Managing Director of statutory health insurers at Check24.


Additional contributions (die) Zusatzbeiträge

Right of termination – (das) Kündigungsrecht 

Benefits (die) Leistungen

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