What is social insurance? Explained for kids
In Germany, social insurance is made up of four kinds of insurance that employees and employers usually split: health insurance for doctors and hospitals, pension insurance for old age, long-term care insurance for when someone needs help with everyday life, and unemployment insurance for when someone loses their job. In the enclosure, the guinea pigs set out a bowl for each one. Toffy’s line: Deducted is not lost.
Good to know: we explain how things work in Germany, where the books are set. Rules and numbers can be different where you live.
How the guinea pigs explain it in Volume 4: Why Is So Little Left?
What is social insurance in Germany? Explained simply
Four kinds of insurance that employees and employers usually split: health insurance for doctors and hospitals, pension insurance for old age, long-term care insurance for when someone needs help with everyday life, and unemployment insurance for when someone loses their job. Mr. Grey makes a point of it: These are not taxes. And the pension isn’t saved up, either. Toffy calls it a food bowl through time: today, the people who work fill the bowl for the people who are already old. A fifth bowl, accident insurance, is paid by the employer alone.
How much does an employee cost an employer?
More than it says at the top of the pay slip. The employer also pays part of the four kinds of insurance, plus accident insurance and a few smaller required contributions. For Knut’s small garden center, that comes to about €3,700 in the example. Christian draws it as a staircase: Knut pays about 3,700, the slip says 3,000 gross, and about 2,050 arrives net. The proper word for it is labor costs. Rocky calls it ghost wages.
- Four bowls: illness, old age, long-term care, unemployment. A fifth one, accident insurance, is paid by the employer alone.
- The pension isn’t saved up. The people who work today fill the bowl for the people who are already old.
- An employee costs a business more than it says at the top of the pay slip.
Sozialversicherung
social insurance
In the books, every paragraph is in German with the English right below it. That way you pick up new words in both languages along the way.
Your turn: take the quiz
No account, no score, nothing gets saved. Just tap an answer.
1. How many kinds of insurance do employees and employers usually split?
2. Is the pension saved up?
3. In the example, about how much does Jonas cost the business if the pay slip says €3,000 gross at the top?
Volume 4: Why Is So Little Left?
Wages, taxes, social insurance and what an employee really costs. For kids ages 10 and up, bilingual German and English, 88 pages, illustrated in full color throughout.
