Public assistance, social insurance system

The system of social security, whose origins date back to the times of the German Emperor, has been continuously advanced in the course of German history. Even today, the welfare state is subject to continuous changes, a recent example of which has been the introduction of the long-term care insurance as the fifth pillar of the German social security system.
Social expenditure comprises cash payments and benefits in kind which are granted to households or individuals by the government, public bodies or enterprises to cover specific social risks and needs. Those benefits are aimed at providing social security against the risks of life, ensuring an equalisation of benefits for families and fulfilling other social policy functions such as providing youth welfare services and support for disabled persons. The funds required are mainly based on contributions to be paid by the insured and by employers and also on government transfers.
The structures and connections within the system of social security are shown most clearly in the social welfare budget of the Federal Government. This annual compilation with a breakdown by institutions gives an overview of social expenditure made by government institutions, public corporations and employers. It also provides a breakdown by functions, that is by budgetary purpose of the expenditure (for example old age and surviving dependants, health, family and marriage).
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