Germany Suspends Nursing Home Pay Mandate as Care Fund Faces €57 Billion Gap

Germany's health ministry drafts bill suspending wage protection for elderly care workers (2027-2030) as part of a €57B long-term care insurance fix, sparking union and expert backlash over social imbalance.

Germany’s federal health ministry has released a draft bill that would suspend a key wage-protection rule for elderly care workers from 2027 through 2030, part of a sweeping package designed to plug an expected €57 billion hole in the statutory long-term care insurance system.

The proposed Pflegeneuordnungsgesetz (Nursing Care Reorganisation Act) combines revenue increases with spending cuts. On the income side, the contribution assessment ceiling will be raised out of cycle in 2027, bringing in roughly €1.6 billion. The extra surcharge for childless members will rise by 0.1 percentage points to 0.7 percent. Further money is expected from mini-jobs and the planned abolition of free spousal co-insurance starting in 2028.

Yet the bulk of the financial effect comes from savings. The ministry projects a total impact of over €11 billion in 2027 alone, climbing to more than €20 billion per year by 2030. A key measure beginning in 2028 is the reduction of the automatic upward adjustment of care benefits — a step that saves up to €4.1 billion annually.

The suspension of the tariff fidelity obligation (Tariftreuepflicht) — which currently forces nursing homes and home-care providers to pay at collectively bargained rates — lies at the centre of the fierce backlash. Labour unions and social policy experts argue that removing the requirement for three years will depress wages in a sector already struggling to recruit and retain staff.

Achim Truger, one of the German Council of Economic Experts, called the draft a “cuts hammer” on 5 June. He said three-quarters of the savings would be borne by the insured, municipalities and care workers, while employers remain largely shielded. Truger criticised the package as socially unbalanced.

Caring relatives also face new burdens. Starting next year, care funds will cover only 70 percent of the pension insurance contributions for people caring for family members — a move that lightens the insurance fund’s load by around €1.8 billion in the first year. In addition, subsidies for nursing-home residents will be phased in more slowly: the highest relief level kicks in only after four and a half years.

Verdi, Germany’s largest service-sector union, warned that suspending the wage mandate would encourage low-pay practices and undermine years of effort to professionalise geriatric nursing. The union has called for protests, including a large demonstration during the conference of health ministers in Hanover on 10 June.

State-level officials are raising alarms as well. Bremen’s health senator Claudia Bernhard cautioned on 4 June that the reform risks pushing care providers into financial distress. She fears health insurers will no longer fully refinance collectively agreed wages. The Free Welfare Association in Lower Saxony echoed that view, pointing to looming refinancing gaps for service providers.

The German Nursing Council (DPR) voiced concern as early as 3 June, warning that if fiscal constraint becomes the guiding principle, it could destabilise the entire nursing care infrastructure. The health ministry defends the package as unavoidable to keep the care fund solvent. Patient advocates, meanwhile, warn that the squeeze may push more care-dependent people onto social welfare.