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The family - a substitute for the social insurance system?

Gerd Andres, Ralf Brauksiepe, Volker Meier, Gerd Landsberg, Jörg Althammer
ifo Institut für Wirtschaftsforschung, München, 2006

ifo Schnelldienst, 2006, 59, Nr. 18, 03-18

The question of whether and to what extent adult children should financially support their parents or parents their children has again become the subject of political discussion in Germany. How far should the responsibility of the family extend? For Gerd Andres, Under Secretary of State at the Federal Ministry for Labour and Social Affairs, the family cannot be a substitute for the social insurance system. Instead it should be supported comprehensively in the safeguarding of basic livelihood by social benefits and a family-friendly social policy. In contrast, Ralf Brauksiepe, MP, CDU/CSU parliamentary group, argues that, especially against the background of the current budgetary constraints, high-income or wealthy relatives of long-time employed persons should be involved in their assistance and thus partly relieve the burden on the taxpayers. For Volker Meier, Ifo Institute, the fundament issue is the nature of the welfare state itself, particularly in his core competence of ensuring a basic livelihood. The basic idea is indisputable that the combating of extreme poverty cannot be left to private-sector care by individuals and or to charitable organisations …. Since tax burdens in Germany are very high, however, and will increase in light of future demographic changes, the welfare state could partially withdrawal from those areas where it is not a question of helping those truly in need. In this respect the idea of obligating rich children of poor parents to assume responsibility for the family points in the right direction." Also Gerd Landsberg, Federation of German Cities and Municipalities, places priority on family solidarity. And Jörg Althammer, University of Bochum, argues that families cannot replace government welfare services but that the state is also dependent on the solidarity and support from families: "The precise demarcation between intra-family solidarity and government welfare services can ultimately only be made by politicians."

JEL Classification: H550,J130

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ifo Institut für Wirtschaftsforschung, München, 2006