Social Security and Economic Systems Flashcards

A comprehensive set of vocabulary flashcards covering German social security, taxation, economic sectors, and business structures based on the lecture transcript.

Tax (Steuer)

A payment in money that citizens and companies must pay to the state for which they receive no direct counter-performance.

Social Market Economy

The economic system in Germany that combines economic freedom with social security and competition.

Solidarity Principle

The principle where people in a society support each other.

European Social Charter

A binding international agreement focused on the protection of social rights.

Sustainability (Nachhaltigkeit)

The principle that resources should be used sparingly and the social security system must remain financially viable in the long term.

Social Security Quota

Approximately $30\,\%$ of the Gross Domestic Product (BIP).

Social Security Financing

Funded by employees (approx. $25\,\%$) and the employer plus the state (approx. $75\,\%$).

Social Insurance Code (SGB)

The legal basis for the social security system in Germany.

Statutory Health Insurance (GKV)

Covers costs for medical treatments, medication, hospital stays, and preventive care.

Statutory Nursing Care Insurance

Supports people in need of care through financial benefits and nursing aids.

Statutory Pension Insurance

Secures old-age provision and pays pensions in the event of age or reduced earning capacity.

Unemployment Insurance

Managed by the Federal Employment Agency, it provides unemployment benefits, advice, and placement.

Statutory Accident Insurance

Responsible for work accidents, commuting accidents, and occupational diseases; contributions are paid $100\,\%$ by the employer.

Health Insurance Contribution Formula

$$\text{Krankenkassenbeitrag} = \text{Bruttolohn} \times \text{Beitragssatz (allgemein + Zusatzbeitrag)} \times 0,5 / 100$$

Wage Tax (Lohnsteuer)

A tax on employee income that acts as a monthly prepayment of income tax, withheld by the employer.

Income Tax (Einkommensteuer)

Tax on the total annual income of a person, including wages, self-employment, rentals, and capital gains.

Progressive Tax Rate

A tax system where the tax rate increases as the income level increases.

Lohnsteuerjahresausgleich

The annual tax adjustment or tax return to determine if too much or too little tax was paid during the year.

Liability Insurance (Haftpflichtversicherung)

Private insurance that covers damages caused to other persons or their property.

Occupational Disability Insurance

Pays a monthly pension if a person can no longer practice their profession permanently due to illness or accident.

Social Court (SG)

The first instance in the social jurisdiction for disputes regarding social law.

Federal Social Court (BSG)

The highest instance in the social jurisdiction responsible for revisions and uniform legal interpretation.

Economic Division of Labor

Specialization where each company focuses on producing goods or services it can offer most efficiently.

Globalization

The increasing worldwide networking and interdependence in economy, politics, culture, and communication.

Firma

The official name of a company as entered in the commercial register.

Unternehmen

An organizational, legal, and economic unit with the intention of making a profit.

Betrieb

The technical organizational unit where production occurs or services are provided.

Profit-oriented Companies

Private companies (e.g., BMW, Adidas) aimed at generating income and profit at their own risk.

Public-benefit Companies

Entities (e.g., public transport, state hospitals) serving the general public's supply rather than maximizing profit.

Liberal Professions (Freiberuflichkeit)

Self-employed activities requiring special expertise and intellectual or creative performance, such as doctors or lawyers.

Primary Sector

The economic sector focused on raw material extraction, such as agriculture and mining.

Secondary Sector

The economic sector involved in processing raw materials, including industry and construction.

Tertiary Sector

The economic sector providing services and trade, such as banks, insurance, and retail.

Quaternary Sector

The economic sector focused on information, IT, research, and telecommunications.

Horizontal Integration

A business combination of companies at the same stage of production or trade, such as two supermarkets merging.

Vertical Integration

A combination of companies at different stages of production, such as a car manufacturer buying a supplier.

Joint Venture

A cooperation where companies jointly found a new company while remaining otherwise independent.

Franchise

A system where one company allows another to use its business model and brand name for a fee.

Fusion

A business concentration where two or more companies merge to become one single company.

Konzern

A concentration where legally independent companies are brought under uniform management.