67 Data Documentation Deutsches Institut für Wirtschaftsforschung 2013 EUROMOD Country Report Germany EUROMOD Version F7.0 Richard Ochmann and Patricia Gallego Granados IMPRESSUM © DIW Berlin, 2013 DIW Berlin Deutsches Institut für Wirtschaftsforschung Mohrenstr. 58 10117 Berlin Tel. +49 (30) 897 89-0 Fax +49 (30) 897 89-200 www.diw.de ISSN 1861-1532 All rights reserved. Reproduction and distribution in any form, also in parts, requires the express written permission of DIW Berlin. Data Documentation 67 Richard Ochmann* (Project Management) Patricia Gallego Granados** EUROMOD Country Report Germany EUROMOD Version F7.0 Project on Behalf of the Directorate-General for Employment, Social Affairs and Equal Opportunities of the European Commission Berlin, May 2013 * DIW Berlin, Department Public Economics, [email protected] ** DIW Berlin, Department Public Economics, [email protected] EUROMOD is a tax-benefit microsimulation model for the European Union (EU) that 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 has been enlarged to cover 27 Member States and is updated to recent policy systems using data from the European Union Statistics on Income and Living Conditions (EU-SILC) as the input database, supported by DG-EMPL of the European Commission. This report documents the work done in one annual update for Germany. This work was carried out by the EUROMOD core developer team, based mainly in ISER at the University of Essex, in collaboration with a national team. EUROMOD coordinator: Holly Sutherland EUROMOD coordination assistant: Cara McGenn EUROMOD developer responsible for Germany: Iva Tasseva National team for Germany: Patricia Gallego Granados and Richard Ochmann. The results presented in this report are derived using EUROMOD version F7.0 EUROMOD is continually being improved and the results presented here may not match those that would be obtained with later versions of EUROMOD. For more information, see: http://www.iser.essex.ac.uk/research/euromod This document is supported by the European Union Programme for Employment and Social Solidarity – PROGRESS (2007-2013). This programme is managed by the Directorate-General for Employment, social affairs and equal opportunities of the European Commission. It was established to finally support the implementation of the objectives of the European Union in the employment and social affairs area, as set out in the Social Agenda, and thereby contribute to the achievement of the Lisbon Strategy goals in these fields. The seven-year Programme targets all stakeholders who can help shape the development of appropriate and effective employment and social legislation and policies, across the EU-27, EFTA-EEA and EU candidate and pre-candidate countries. PROGRESS mission is to strengthen the EU contribution in support of Member States’ commitment. PROGRESS is instrumental in providing analysis and policy advice on PROGRESS policy areas; monitoring and reporting on the implementation of EU legislation and policies in PROGRESS policy areas; promoting policy transfer, learning and support among Member States on EU objectives and priorities; and relaying the views of the stakeholders and society at large For more information see: http://ec.europa.eu/progress The information contained in this publication does not necessarily reflect the position or opinion of the European Commission. Data Documentation 67 Contents CONTENTS 1 BASIC INFORMATION ...........................................................................................................1 1.1 Basic Figures ............................................................................................................................... 1 1.2 The Tax and Benefit System ....................................................................................................... 2 1.2.1 Aggregate Figures from Fiscal Budget ............................................................................ 2 1.2.2 Basic Information about the Tax-Benefit System ........................................................... 3 1.3 Social Benefits ............................................................................................................................ 5 1.3.1 Benefits from Statutory Unemployment Insurance ....................................................... 5 1.3.2 Benefits from Statutory Health and Accident Insurance ................................................ 8 1.3.3 Benefits from Statutory Pension Insurance .................................................................... 9 1.3.4 Pensions from Other Institutions: ................................................................................11 1.3.5 Public Transfers to Private Households ........................................................................12 1.3.6 Scope and Scale ............................................................................................................17 1.4 Social Contributions ................................................................................................................. 18 1.4.1 Relevant Regulations ....................................................................................................19 1.4.2 Scope and Scale ............................................................................................................21 1.5 Taxes ........................................................................................................................................ 22 1.5.1 Direct Taxes ..................................................................................................................22 1.5.2 Indirect Taxes ................................................................................................................26 1.5.3 Scope and Scale ............................................................................................................27 2 SIMULATION OF TAXES AND BENEFITS IN EUROMOD ............................................................... 28 2.1 Scope of Simulation ................................................................................................................. 28 2.2 Structural Changes between 2009 and 2012 ........................................................................... 32 2.3 Order of Simulation and Interdependencies (2009-2012) ....................................................... 33 2.4 Social Benefits .......................................................................................................................... 35 2.4.1 Correction of Take-up of Social Benefits ......................................................................35 2.4.2 Minimum Wage (minwage_de) ....................................................................................35 2.4.3 Child Benefits (bch_de) .................................................................................................35 2.4.3.1 Definitions .................................................................................................... 36 2.4.3.2 Eligibility Conditions ..................................................................................... 36 2.4.3.3 Income Test .................................................................................................. 36 2.4.3.4 Benefit Amount ............................................................................................ 36 2.4.3.5 EUROMOD Notes ......................................................................................... 36 2.4.4 Unemployment Benefits I (bunct_de) ..........................................................................36 III Data Documentation 67 Contents 2.4.4.1 Definitions .................................................................................................... 37 2.4.4.2 Eligibility Conditions ..................................................................................... 37 2.4.4.3 Income Test .................................................................................................. 37 2.4.4.4 Benefit Amount ............................................................................................ 37 2.4.4.5 Benefit Duration ........................................................................................... 37 2.4.4.6 EUROMOD Notes ......................................................................................... 37 2.4.5 Disability Pension from the Statutory Accident Insurance (pdiss_de) .........................38 2.4.5.1 Definitions .................................................................................................... 38 2.4.5.2 Eligibility Conditions ..................................................................................... 39 2.4.5.3 Income Test .................................................................................................. 39 2.4.5.4 Benefit Amount ............................................................................................ 39 2.4.5.5 EUROMOD Notes ......................................................................................... 39 2.4.6 Education Benefits (bed_de) ........................................................................................40 2.4.6.1 Definitions .................................................................................................... 40 2.4.6.2 Eligibility Conditions ....................................................................................