Citizens Relief Act

There's been a lovely new German word since January 2010: das Bürgerentlastungsgesetz! I´ve translated it as the Citizens Relief Act! What is it and what are the implications? The Federal Constitutional Court in Germany decided that health insurance payments help secure a citizen´s existence and should therefore be tax-free, overturning a previous Government line of thinking.
So the Government introduced the new law from January 2010, which concerns payments for both public and private health insurance. In many cases, up to 79.5% of the monthly premiums (even for the whole family in the public insurance sector) can be offset against tax. The costs of the long-term nursing care insurance (Pflegeversicherung) are 100% tax deductible. Only cover corresponding to public insurance level is deductible:top-ups such as private hospital bed,high dental replacment cover and alternative medical treatment etc are not included for tax purposes.Your health cover has not changed with the introduction of this new law but one important implication is:health insurance companies will now send your policy payment details DIRECT to the tax office (Finanzamt), meaning you have to include your personal tax ID number (Steueridentifikationsnummer) on the application form for those taking out a policy for the first time or changing their health insurer. A further implication in the near future: it´ll be a way of checking who has not got appropriate health insurance in line with the new health reform laws of January 2009! Be warned!

 

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