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To China with a German Employer – What do I Need to Know about Social Insurance?
by Thomas Batsching
You work in Germany and your boss would like to send you to China for several years? How does that work? Are there disadvantages I need to worry about? Here is some information.
If you work for an extended time in China, or just in general in a foreign country, there are many topics that need to be sorted out. Among others these are questions of the employment contract, salary, and also taxes and social insurance topics, and all these subjects are not always simple.
In three articles we will cover the basics of work transfers to foreign countries, tax topics and questions concerning social insurance.
Since the essentials of being posted to a foreign country were covered in the last article, this one includes information about social insurance. Admittedly, social security sounds pretty boring, but it is important!
When talking about social insurance, several kinds of insurance are actually meant. Those are: unemployment insurance, health insurance, long-term care insurance, pension insurance and accident insurance.
First some general information: when an employee has an employment contract in Germany and is transferred to China for a limited time, then the existing social security agreement between Germany and China is in effect.
This agreement guarantees that an employee can pay into the German pension insurance and into the unemployment insurance for up to four years and is therefore insured here. Regrettably though the social security agreement does not include the areas of health and long-term care insurance or accident insurance! The employer has to provide for these types of insurance separately.
Concerning health insurance, it is recommended that you arrange for private health insurance coverage and additionally for so-called entitlement insurance for the time spent abroad.
With this more reasonably priced solution though care must be taken: costs for illnesses that were present before the time spent in the foreign country will only be assumed if the conditions were revealed beforehand. The information about existing conditions raises the insurance rate somewhat, but you are then completely covered – and that is important!
There is also a second important point: so-called entitlement insurance should also be purchased. This guarantees that you are again insured with your insurance company after your return from the foreign country. Also if you were to become an invalid you would immediately be entitled to benefits from the statutory nursing care insurance. This insurance is to be purchased no later than four weeks before departure.
If the spouse or children remain in Germany, the existing insurance should by all means continue. Only then will they have insurance coverage!
Accident insurance, or more precisely the so-called statutory accident insurance, must also be considered, because this does not apply during extended stays abroad. Generally private accident insurance for occupational disability and death is necessary.
One final note: The employer must apply for a so-called assignment pass – then nothing will go wrong with your social insurance coverage!