Germany provides highly advanced social welfare. The state’s principle of welfare is guaranteed and unchangeable by the Constitution (Article 20 Paragraph 1, Article 28 Paragraph 1). Therefore, as a welfare state, it is an obligation for policies. The state should ensure the livelihoods of its citizens (social security) and balance out the socially weak and the socially strong (social justice). The social welfare is ensured with various methods, for example, the senior citizens are secured, other life risks, such as illness, need for care, unemployment, are also taken care of.
The main elements of the welfare state are statutory social security schemes. Statutory pension insurance (GRV) is the largest social security system in the Federal Republic.
Pension is socially balanced, because the statutory pension insurance offers the protection of a strong intergenerational solidarity. The life after retirement will be secured by the pension. Unlike private insurance, gender, age or health status do not play a role in the contribution to statutory pension insurance. Important phases of life, such as raising children, are also covered for the society as a whole. More importantly, statutory pension insurance provides not only social security in old age, but also during the employment phase, in the form of rehabilitation benefits or pensions due to reduced earning capacity. In addition, surviving dependants are supported by the pension in the event of the death of their spouse or their registered civil partnership or by the orphan's pension in the event of the death of the parents.
Pension is individual, because it is mainly calculated on the basis of the income insured in each case. Thus, the statutory pension is a reflection of the lifetime achievement. The supplementary provision can be designed individually at work or privately. With the state support this individual design of one's own pension provision is reinforced.
Pension is sustainable, for it is reliable and functioning for a long period of time. In the course of its development, the statutory pension insurance has already demonstrated its adaptability to changing economy, demography and social conditions. Pension also provides security for individuals, as pension rights and entitlements are under the constitutional property protection. The principle of the statutory pension is an integral part of the German understanding of society and is supported by all important social groups.