Germany's long-term care system faces €22.5 billion crisis by 2028

Germany’s long-term care insurance system is under severe financial strain. The scheme, a key part of social security for 31 years, now faces its biggest crisis yet. Rising costs and unpaid debts have pushed the fund to the brink, with residents already paying the maximum possible contributions. The care insurance fund is spending far more than it receives. Personal contributions from residents have hit their legal limit, leaving no room for further increases. Meanwhile, the system only covers part of long-term care costs, forcing families to pay the rest.

The federal government has added to the pressure by failing to cover pension contributions for family caregivers. This year alone, the unpaid amount reaches roughly €5 billion. On top of this, €5 billion in COVID-19-related debts remain unsettled. Combined, the government should reimburse the system around €10 billion in 2024.

Further strain comes from the federal states, which have not covered investment costs in nursing homes. If they did, residents could save an average of €500 per month. Without intervention, the fund’s projected deficit for 2027 and 2028 stands at €22.5 billion.

Health Minister Nina Warken (CDU) is now preparing a response. A draft law for care reform is expected by mid-May. The system’s financial survival depends on urgent action. Without reforms, rising deficits and unpaid obligations will deepen the crisis. The government must address both immediate debts and long-term funding gaps to keep care affordable for residents.