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BERLIN (Reuters) – Germany’s government gave the green light to a care system reform on Wednesday that includes a 1 billion euro ($1.22 billion) annual tax subsidy to increase the pay for nursing staff and reduce the contributions of care home residents.

The reform, which will affect Germany’s 1.2 million care workers, comes after criticism of low pay for staff during the coronavirus pandemic and is an attempt to attract more workers to the job to deal with an aging population.

From next year, the government plans to contribute 1 billion euros annually to Germany’s long-term care insurance, which is part of obligatory health insurance.

The contribution rate for childless people will increase by 0.1 percentage points to 3.4% of their gross pay, while the contribution level for parents will remain at 3.05%.

Care homes and care service providers would have to pay their staff a minimum salary agreed with trade unions from September 2022 to be still allowed to settle their accounts with the health insurers.

The government hopes that this will lead to higher wages for many of the staff as only around half of care workers are currently paid on the basis of collective wage agreements, according to the labour ministry.

The contribution level care home residents have to pay should be limited depending on the level of their care dependency.

($1 = 0.8189 euros)

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