hTTi

I was recently laid off and also received severance pay with my last payroll. I'm not going to receive any more pay going forward. According to health insurance I don't need to do anything until my application for unemployment benefits has been processed but the letter they sent also mentions to pay contributions if I continue to receive any severance pay going forward. According to the company's payroll, only wage taxes are paid on my severance pay and no social taxes on that amount to be paid. Who's correct in this case and do I need to pay anything on my behalf at all to any social contributions like health etc.?

cat85 wrote: ↑Tue Apr 02, 2024 9:54 am I was recently laid off and also received severance pay with my last payroll. I'm not going to receive any more pay going forward. According to health insurance I don't need to do anything until my application for unemployment benefits has been processed but the letter they sent also mentions to pay contributions if I continue to receive any severance pay going forward. According to the company's payroll, only wage taxes are paid on my severance pay and no social taxes on that amount to be paid. Who's correct in this case and do I need to pay anything on my behalf at all to any social contributions like health etc.?

Your payroll department is correct and no, you do not have to pay social security contributions on an Abfindung (= severance pay): https://www-hensche-de.translate.goog/R ... r_pto=wapp

Are social security contributions and taxes deducted from the severance payment?
A severance payment is not a salary subject to contributions. According to § 14 para. 1 sentence 1 of the Fourth Book of the German Social Code (SGB IV) this includes all current or one-off income from employment, regardless of whether there is a legal entitlement to the income, under what title or in what form it is paid and whether it is earned directly from the employment or in connection with it.
However, a severance payment is not remuneration because, according to the case law of the Federal Social Court (BSG), it cannot be allocated to the period of employment that has ended. This is because severance pay is paid because of the loss of future earning opportunities and not because of the work performed in the past.
Therefore, no social security contributions are deducted from a severance payment, i.e. no contributions to pension, health, long-term care and unemployment insurance are deducted.
However, severance pay is subject to taxation in accordance with the rules on wage tax deduction. Information on how severance pay is taxed can be found under the heading Severance pay and tax: https://www-hensche-de.translate.goog/R ... r_pto=wapp

So, do I need to inform the health isurance at all or just don't do anything. The link you shared makes it quite clear that nothing needs to be done. This is the part of the letter that made me ask the question:

Waren Sie bisher beschäftigt und erhalten Sie noch eine Abfindung von Ihrem letzten Arbeitgeber? Dann informieren Sie uns bitte darüber. Wir prüfen dann, ob Sie dafür Beiträge zahlen müssen.

cat85 wrote: ↑Tue Apr 02, 2024 9:58 pm So, do I need to inform the health insurance at all or just don't do anything. The link you shared makes it quite clear that nothing needs to be done. This is the part of the letter that made me ask the question:

Waren Sie bisher beschäftigt und erhalten Sie noch eine Abfindung von Ihrem letzten Arbeitgeber? Dann informieren Sie uns bitte darüber. Wir prüfen dann, ob Sie dafür Beiträge zahlen müssen.

Ok, there is a scenario in which you would have to pay public health&nursing contributions on your severance pay:
If through your severance pay, your employer is cutting short the termination period, i.e. if part of that severance pay is actually the salary your employer would have needed to pay you throughout the termination period.

Because in that case, you also would not get Arbeitslosengeld I right away, but rather your unemployment benefits claim would be suspended (= der Anspruch ruht) until that "salary during termination period" component of the Abfindung is (partly) "used up".
Your unemployment benefits claim being suspended is laid down in § 158 SGB IV: https://www-gesetze--im--internet-de.tr ... r_pto=wapp

And with your unemployment benefits being suspended, you would no longer be/would not become (if you were previously a high earner and therefore a voluntary member of public health insurance, you fall back into mandatory membership as soon as you draw unemployment benefits) a mandatory member of public health insurance through drawing unemployment benefits, but would continue on as a voluntary member of public health insurance.
The problem is that in the case of voluntary members, public health insurance charges on a much broader contribution base:

• you would also have to pay contributions on your worldwide rental income and on your worldwide capital income, please see here for the table with the catalogue of income types that they charge voluntary members on (= Katalog von Einnahmen und deren beitragsrechtliche Bewertung nach § 240 SGB V vom 11. Dezember 2023): https://www.gkv-spitzenverband.de/media ... refrei.pdf
  If you are wondering to what § the entries in the table refer to, they refer to the "principles for calculating the contributions of voluntary members" (= Einheitliche Grundsätze zur Beitragsbemessung freiwilliger Mitglieder): https://www.gkv-spitzenverband.de/media ... lieder.pdf
  If someone should read this post in the future, you can find the up-to-date versions of both these documents here: https://www.gkv-spitzenverband.de/krank ... essung.jsp

--> your public health insurance would then charge contributions on the "salary during termination period" component of the Abfindung.

Here is a very good Finanztip article that explains it in detail (they also have an example ): https://www-finanztip-de.translate.goog ... r_pto=wapp

This is why:

cat85 wrote: ↑Tue Apr 02, 2024 9:54 am According to health insurance I don't need to do anything until my application for unemployment benefits has been processed

your public health insurer wants to wait and see whether you will get unemployment benefits right away.
Because if you do, they know that they won't get to charge you any public health&nursing contributions on your Abfindung, i.e. by waiting, they save themselves the work of checking your Abfindung for a "salary component", they make the Agentur für Arbeit people do the checking work for them

Ok, there is a scenario in which you would have to pay public health&nursing contributions on your severance pay:
If through your severance pay, your employer is cutting short the termination period, i.e. if part of that severance pay is actually the salary your employer would have needed to pay you throughout the termination period.

No, I'm not going to receive any more payments. It was a one time payment of severance pay with my last pay roll after observing the termination/notice period.

You said that I'll become a mandatory member but in the letter the insurance said, that now I'm a voluntary member until my case is decided. Voluntary = Freiwillig, right? This is what the letter said:

Bis Sie den Bescheid haben, brauchen Sie keine Beiträge zu zahlen. Sie sind bei uns ab dem 1. April 2024 freiwillig versichert. Das bedeutet für Sie, dass Sie unsere Leistungen auch weiterhin wie gewohnt nutzen können.

Wird Ihr Antrag rückwirkend genehmigt, übernimmt die Agentur für Arbeit bzw. das Jobcenter Ihre Beiträge.

Waren Sie bisher beschäftigt und erhalten Sie noch eine Abfindung von Ihrem letzten Arbeitgeber? Dann informieren Sie uns bitte darüber. Wir prüfen dann, ob Sie dafür Beiträge zahlen müssen.

your public health insurer wants to wait and see whether you will get unemployment benefits right away.
Because if you do, they know that they won't get to charge you any public health&nursing contributions on your Abfindung, i.e. by waiting, they save themselves the work of checking your Abfindung for a "salary component", they make the Agentur für Arbeit people do the checking work for them

But in the letter it says the time period is usually 3 months for the Unemployment Agency to process the application so they will pay the contributions in retrospect, if approved and if it doesn't, then I need to inform them. So, what I got from all this is I don't have to get in touch with them yet for the "Abfindung" while waiting for my job less claim, right?

cat85 wrote: ↑Wed Apr 03, 2024 2:37 pm You said that I'll become a mandatory member but in the letter the insurance said, that now I'm a voluntary member until my case is decided. Voluntary = Freiwillig, right? This is what the letter said:

Bis Sie den Bescheid haben, brauchen Sie keine Beiträge zu zahlen. Sie sind bei uns ab dem 1. April 2024 freiwillig versichert. Das bedeutet für Sie, dass Sie unsere Leistungen auch weiterhin wie gewohnt nutzen können.

Wird Ihr Antrag rückwirkend genehmigt, übernimmt die Agentur für Arbeit bzw. das Jobcenter Ihre Beiträge.

Waren Sie bisher beschäftigt und erhalten Sie noch eine Abfindung von Ihrem letzten Arbeitgeber? Dann informieren Sie uns bitte darüber. Wir prüfen dann, ob Sie dafür Beiträge zahlen müssen.

What they are saying that if you will get Arbeitslosengeld I right away, i.e. if your Abfindung passes the Agentur für Arbeit's checks, you will retroactively be changed from a voluntary member of German public health insurance, to a mandatory member.

cat85 wrote: ↑Wed Apr 03, 2024 2:37 pm But in the letter it says the time period is usually 3 months for the Unemployment Agency to process the application so they will pay the contributions in retrospect, if approved and if it doesn't, then I need to inform them. So, what I got from all this is I don't have to get in touch with them yet for the "Abfindung" while waiting for my job less claim, right?

Well, from the wording, they do seem to want you to contact them now and tell them about the Abfindung.
Which mean a double effort, since both the Agentur für Arbeit and your public health insurer will be checking your Abfindung for "salary components", but if they want to do it this way, so what.
--> I would just send them the Abfindung contract.