Definition and significance of the reference value in German law
Die Reference value is a central concept in the German legal system, particularly in social insurance law. It serves as a benchmark and calculation basis for various calculations and thresholds, especially in the area of statutory social insurance. The reference value is adjusted annually based on the average earnings within the statutory pension insurance scheme and is of far-reaching importance for determining statutory entitlements and obligations.
Legal foundations of the reference value
Statutory anchoring
The fundamental statutory regulation for the reference value is found in § 18 of Book IV of the Social Code (SGB IV). There, the reference value is defined as a term of social insurance law, and its annual adjustment is mandated. The Federal Ministry of Labour and Social Affairs announces the applicable values each year in the Federal Law Gazette.
Significance for different branches of social insurance
The reference value is particularly relevant in the following areas:
- Statutory health insurance
- Nursing care insurance
- Pension insurance
- Unemployment insurance
- Accident insurance
In these branches, numerous contribution assessment and benefit calculations are made by reference to the reference value.
Calculation of the reference value
Determination of the reference value
The reference value is determined each year based on the average gross earnings of all insured persons in the statutory pension insurance scheme for the year before last. The values are set for the entire federal territory as well as separately for the new federal states (East), as long as wage levels differ (§ 18(2) SGB IV).
Sample values
- Reference value (2024, West): 3,395 euros per month
- Reference value (2024, East): 3,290 euros per month
These values change annually depending on wage developments.
Areas of application of the reference value
Contribution assessment ceilings and minimum contributions
The reference value influences many thresholds in social insurance law. It is particularly decisive for the determination of minimum and maximum contributions, for example:
- Contribution assessment ceilings in statutory health, nursing care, pension, and unemployment insurance
- Compulsory insurance thresholds
- Minimum contribution assessment for voluntarily insured persons
Income limits for insurance law assessments
The reference value also serves as a benchmark for assessing employment relationships, such as in the evaluation of marginal employment (so-called mini-jobs and midi-jobs).
Benefit entitlements
Certain social benefits and entitlement limits are calculated based on the reference value, for example in connection with maternity benefits, parental benefits, transitional benefits, or when determining pension entitlements in the event of an insured event.
Regional differentiation of the reference value
Difference between West and East Germany
As long as income conditions in the new and old federal states differ, two different reference values exist for the contribution region West (old federal states, Berlin-West) and East (new federal states, Berlin-East). These differences reflect different economic strength and wage levels and are therefore applied in numerous statutory regulations.
Adjustment and announcement
Annual adjustment
The adjustment of the reference value regularly takes place on January 1 of each calendar year. The calculation is based on statistical data from the German Pension Insurance and is published by the Federal Ministry of Labour and Social Affairs in the Federal Law Gazette.
Publication and legal effect
With the publication of the reference value in the Federal Law Gazette, the new values gain the force of law. As a result, binding legal consequences arise for insured persons, employers, and social insurance institutions.
Significance in other legal areas
Tax law and other areas of law
Beyond social insurance, the term reference value is also applied in other areas of law, for instance in tax law, when it comes to tax allowances or deductibility. Reference values may also be used in employment law or company pension schemes as benchmarks in employment contract or collective bargaining regulations.
Legal consequences of a change in the reference value
Implications for existing contracts and entitlements
A change in the reference value can result in an immediate adjustment of contributions, social benefits, and other statutory entitlements. Affected individuals, employers, and institutions must always adapt their calculation bases and payments to the current reference value.
Criticism and further development
Transparency and comprehensibility
The complexity and the multitude of regulations dependent on the reference value are frequently criticized as non-transparent. The standardization or further alignment of the reference values for East and West is just as much a focus of legal policy debates as the revision of the reference system.
Summary
The reference value is a central, legally defined calculation figure that is used particularly in social insurance law to determine contributions, benefit entitlements, as well as for the insurance law assessment of employment relationships. Its annually adjusted amount affects a wide range of legal areas and has far-reaching practical consequences for insured persons, employers, and social insurance carriers.
Bibliography and sources
- Social Code (SGB) IV § 18 Reference Value
- Federal Law Gazette (current Reference Value Ordinance)
- German Pension Insurance: Statistical Reports
- Federal Ministry of Labour and Social Affairs: Announcements on the reference value
Note: For current values and specific individual questions, it is recommended to refer to the latest publications of the Federal Ministry of Labour and Social Affairs as well as the German Pension Insurance.
Frequently Asked Questions
How is the reference value determined in social insurance?
In social insurance, the reference value is adjusted annually by the legislator based on the development of gross wages and salaries in Germany. The figures collected by the Federal Statistical Office for the year before last are decisive for this. The reference value is regulated in § 18 of Book IV of the Social Code (SGB IV) and is announced by statutory order of the Federal Ministry of Labour and Social Affairs, effective for the following year. A distinction is made between the reference value for the old (West) and new (East) federal states, in order to account for regional differences in income. The reference value is set in euros and applies to one calendar year at a time. It is an important calculation basis that forms the foundation for numerous calculations in German social law, such as contribution assessment ceilings and minimum contributions for different insurance branches.
In which legal provisions does the reference value play a role?
The reference value is firmly anchored in various laws and ordinances. In addition to SGB IV, which regulates the general definition and adjustment, it can be found in the Social Codes for statutory pension, health, nursing care, and unemployment insurance, as well as in the Maternity Protection Act and the provisions for the Artists’ Social Insurance. There, the reference value is used as the calculation basis for minimum or maximum amounts, insurance thresholds, or as a benchmark for entitlement calculations. It is also relevant for determining contribution assessment ceilings, minimum income thresholds for voluntary health insurance members, and de minimis thresholds within the scope of employment. Thus, the reference value is a central calculation parameter in social insurance law.
What is the practical significance of the reference value for employers and insured persons?
For employers, the reference value is particularly relevant when calculating social insurance contributions. When determining, for example, whether an employment relationship is subject to compulsory insurance or exempt (e.g. in the case of marginal or short-term employment), the reference value is used. It also affects the amount of contributions payable for certain groups of persons, such as voluntarily insured persons in health insurance, pensioners, or during certain protection periods under the Maternity Protection Act. For insured persons, the reference value is relevant because, among other things, it influences minimum and maximum contributions as well as premium subsidies, and thus indirectly determines the individual’s financial burden through social insurance contributions.
What regional differences exist regarding the reference value?
Traditionally, the reference value is set separately for the accession area (new federal states including Berlin-East) and the old federal states. This reflects the different wage levels in East and West Germany. The setting is based on the respective regional gross wage and salary development. The different reference values particularly affect calculations that are geographically specific, such as the amount of social insurance contributions or compensation benefits. The regional differentiation is reviewed annually and may decrease or increase—depending on how wage developments in both regions compare.
How does the reference value change over time?
The reference value is dynamic and is adjusted annually. It is determined on the basis of average gross earnings, meaning that fluctuations in wage development directly impact the level of the reference value. If average wages increase, the reference value also rises, so that higher contribution ceilings or minimum contributions apply in the following year. This regular adjustment ensures that the reference value always reflects the current average wage level and prevents it from being devalued by general wage increases.
What influence does the reference value have on the pension insurance?
In statutory pension insurance, the reference value is a key element for calculating various contribution and benefit parameters. It serves, for example, as the basis for determining the minimum contribution assessment basis for voluntary contributions, for calculating contributions for certain groups (such as compulsorily insured self-employed persons or non-professional caregivers), as well as for evaluating credited periods. Furthermore, it affects the determination of earning points, which are crucial for pension calculations. Changes in the reference value thus have a direct impact on future pension entitlements as well as on the contribution levels of individual policyholders.
What role does the reference value play in setting social insurance contributions for voluntary members?
For voluntarily insured persons in statutory health insurance, the reference value serves as a measure for calculating the minimum contribution assessment basis. For persons whose actual income is below the reference value, at least the reference value (or a certain percentage thereof) is used for the contribution calculation. This ensures that, even with low actual income, the contribution paid to the community of solidarity does not fall below a fixed minimum. This regulation is intended to prevent voluntary insured persons from paying unreasonably low contributions, thereby circumventing the solidarity principles of statutory health insurance. The reference value thus acts as a safeguard for the solidarity community.
Are there exceptions or special rules for the application of the reference value in social insurance law?
There are different rules for certain groups of persons and situations regarding the application of the reference value. For example, marginally employed persons, trainees, students, or during parental leave or military service may be subject to their own calculation bases and special contribution rules. Special regulations may also apply in calculating contributions for voluntarily insured persons, self-employed persons without employees, and compulsory insured caregivers, for example through deviating assessment bases or percentages of the reference value. Such detailed statutory exceptions ensure a differentiated and fair system of contributions and benefits in German social insurance law.
