With the annual earnings limit (JAEG) there is a value in Germany, which determines whether you are compulsorily insured in the statutory health insurance or not. It is also called the mandatory insurance limit. It is of relatively high importance because this value determines whether you have freedom of choice in health insurance.
So high is the annual wage limit of 2018
- General JAEG : Monthly: 4.950,00 Euro – Annual: 59.400 Euro
- Special JAEG : Monthly: 4.425,00 Euro – Annually: 53.100 Euro
Entry requirement for private health insurance
So you have to reach the JAEG to even complete private health insurance. This makes it possible, for example, to choose part of the benefit components and the amount of reimbursements in health insurance itself. Private health insurance companies also offer tariffs that promise higher-quality medical care and include services such as chief physician treatment.
However, you must not equate the annual earnings limit with the income threshold. This is relevant when it comes to calculating the contribution to social security. In the area of health insurance, for example, since 2003 it has been well above the annual income threshold.
PKV or GKV: Compulsory insurance limit crucial
When it comes to deciding on a private or statutory health insurance, you will have to go beyond this insurance limit in the current and the following calendar year.
But even here there is a peculiarity, and indeed for all those who were not insured as of December 31, 2002 and were therefore privately insured. This limit – also called the special annual income limit – is about ten percent below the general compulsory insurance limit and applies without any time limit. It corresponds exactly to the income threshold in the statutory health insurance. And even in cases where you have already changed your employer or, for example, become insured again in health insurance in the meantime.
Exempted from this rule are, for example, students who were privately insured at the same time, but did not exceed the annual earnings limit.
Amount of the annual wage limit
The annual earnings limit is adjusted annually and has thus undergone a changeable development in recent years. The general annual salary limit for 2017 is 4,800.00 euros per month or 57,600 euros per year.
The special annual wage limit is € 4,350.00 per month or € 52,200.00 per year in parallel. It applies, as already explained, to all those employees who were not compulsorily insured as of December 31, 2002 and whose income accordingly exceeded the then JAEG.
In recent years, this mandatory insurance limit has increased consistently, but not from year to year. Even in 2006, the general JAEG was 3,937.50 euros per month. It has increased by almost 19 percent within ten years.
Below you can see the respective values for the general and special annual earnings limit since 2006.
||Annual income limit
||Special annual wage limit
As the table shows, year to year changes are neither uniform nor always in the same direction. For example, from 2010 to 2011, there was a slight downward adjustment.
This is due to the fact that the amount of JAEG is determined by an ordinance. The Federal Ministry of Labor and Social Affairs takes the salaries of employees as a gross value and measures how these values have developed from the previous calendar year to the previous calendar year.
The change between 2010 and 2011 is therefore directly related to the consequences of the global economic crisis and led to a slight reduction in the overall trend.
That means the insurance limit for you
Social insurance has a long tradition in Germany. Otto von Bismarck introduced it, thus establishing a far-reaching social system with an impact on our lives today. With the emergence of private health insurance, the statutory health insurance companies got a competition. The state has repeatedly intervened and, for example, laid down who may ever private health insurance. In order to regulate this uniformly, the annual earnings limit was introduced as the relevant mandatory insurance limit.
Boundary should not be a sole change argument
You can not accept the mandatory insurance limit and see as an argument that a change to private health insurance is inevitably worthwhile. For that the tariffs and above all the contribution risks are too big, than that here finally a recommendation can be made. The decisive factor is which services are important to you and which system has the best cost-benefit ratio.
How to obtain insurance freedom
Basically, you do not have to change employer to obtain insurance freedom. Of course, this is simply possible by getting a salary increase. Now it is important to extrapolate your salary from the time of the increase: Multiply your new salary by twelve and look in the table above to see if you can get over the JAEG.
If yes, you will be insured at the end of the current calendar year. So now you have freedom of choice. This also applies if the mandatory insurance limit is not exceeded in spite of the salary increase during the current calendar year.
When you will be insured again
Conversely, there are already immediate consequences that you must consider by falling below the JAEG.
If you are still employed and your income falls below the JAEG, for example due to a shorter working time, you will be required to take out insurance again. However, this does not apply to temporary transgressions.
Insofar as the annual earnings limit for the new year is higher and you then current income does not exceed this limit, you are also insured again.
There are exceptions, in particular, if you receive maternity, sick, injured or transitional allowances. Even in cases where you start reintegration after incapacity for work, there are exceptions. The same is true according to case law, even if you were on strike or were affected by a strike, so you have lost income.
Exceeding / falling below the JAEG: That changes
As already explained, there are many more exemptions for falling below the compulsory insurance limit than the other way round for exceeding this value. An advantage here is that you can be insured privately.
However, you must follow certain rules if you come across the JAEG, but this is not the only result of your regular monthly salary. For example, if you receive sickness benefits or take unpaid leave, it has no effect. Here it is fictitiously assumed that you receive your salary as usual. If you change employer and become unemployed for a short time, you may not count the unemployment benefit I on the JAEG. The decisive factor here is always the number of months in which you can prove that you are gainfully employed.
Not all earnings count
Please note that not every income is included in the annual earnings limit at the same time. You may start to work as a sideline, but minijobs are explicitly excluded.
Even with overtime, the principle applies that only those overtime hours are added, which you receive as fixed lump sums and which are regularly added to the salary. Child supplements, supplements for night, Sunday or public holidays as well as a cost replacement for travel expenses are excluded.
If you fall below the JAEG, then this has above all a meaning for the re-entry into the legal health insurance. In that case, you must cancel your private health insurance, retroactively and no later than three months after becoming compulsory. Otherwise, you may cancel with a one-month notice period at the end of the current month. Here it can happen that contributions are paid twice. So once for the private policy and once for the statutory health insurance.
What counts for calculating the compulsory insurance limit
You will then be compulsorily insured in the statutory health insurance if your regular annual salary does not exceed the respective mandatory insurance limits.
These include, on the one hand, the pay regularly paid and, on the other, one-off payments received. Here, there are no restrictions if, for example, you receive remuneration from several occupations.
If you are self-employed and self-employment is not the main occupation, it will have no effect on your JAEG. It looks different with several mini jobs. In this case, the first 450 EUR job is left out, but all others are added to the mandatory insurance limit.
However, you are not allowed to include bonus payments that your employer makes, for example, for tax or non-contributory purposes. There are also bonuses that you receive from your marital status, such as child allowances.
Are you a career starter or will you be changing your employer soon? Since a change in the law in 2011, it is no longer necessary to consider your income in previous years. The so-called 3-year rule is no longer valid. If your salary is above the respective JAEG, you are then no longer insured directly from the beginning. It also benefits career starters who immediately exceed the compulsory insurance limit. Here, you can also include capital-efficient benefits (VwL): These are state-subsidized savings allowances, which the employer grants to you in addition or as part of the salary. The funds are paid directly by the employer to the savings account, in many cases you can pay up to certain maximum limits also an additional own contribution.
Explicitly not part of the calculation are compensations that you have received because you have not used your holiday entitlement in whole or in part. The Federal Social Court has already judged here over 20 years ago (see Az 12 RK 26/90). If your contract of employment provides for certain benefits in kind, such as a company flat or a service vehicle, then it depends on the individual case again. If you can expect these services “regularly”, you will be credited to JAEG.
Where exactly does the contribution assessment threshold apply?
You must clearly separate the contribution assessment limit from the annual earnings limit (JAEG) or the mandatory insurance limit. It serves as a measure when it comes to calculating the contributions to the pension insurance, the health and long-term care insurance as well as the unemployment insurance. Anything beyond that will no longer affect the post. Thus, the income threshold is used by social security for calculation, while the annual income limit determines whether or not you are insurable. And always in the field of health insurance.
What happens if part of my earnings are used for company pension plans?
If part of your regular earnings is lost, for example, when it is converted into a company pension scheme, this has a direct impact on the annual earnings ceiling. Up to four percent of the income threshold, which applies to the statutory pension insurance, are then social insurance. This applies to the old federal states. It is therefore possible that you are thus again below the JAEG and therefore again be insured in the statutory health insurance.
My pay was increased retroactively. What do I have to consider?
When calculating the regular annual earnings, there is a crucial point to note. If this is to be calculated for the current year or the coming calendar year, all components that are expected to be paid must be included.
My salary is reduced by short-time work. What are the effects?
You are a member of the statutory health insurance as long as you also receive short-time allowance. In this case, it is assumed that you will continue to receive regular pay. The short-time work is thus not considered in the form. It therefore has no influence if you have private health insurance and are below the JAEG due to short-time work. This will not automatically reinsure you in the statutory health insurance.