Reading coffee grounds at the BEG

This is about software errors in forecasting upcoming tax savings that can be used to fund precautionary measures.

Currently, there is a fashion to throw small computational tools on the market that are as simple as possible and at the same time provide impressive results. Tools for tax savings through the improved deductibility of health insurance premiums (Citizens’ Relief Act, abbreviated BEG) are particularly in vogue. Apparently there seems to be a hidden director instruction for many of these computers.

According to this, firstly, the calculated savings must be as high as possible and, secondly, the inputs must be as tight as possible. The savings must then only be forecast for 2010 and the programming effort must remain low. No manipulation is stopped for the sake of spectacular results.

Thus not existing health insurance contributions are invented, entered contributions to private health insurances are taken over regardless of Chefarztbehandlung illegal unreduced as well as savings-reducing data not at all first raised. There is also trickery in the calculation.

In the example given, there is initially no church tax liability.

The annual saving amounts to cent-exactly “calculated” 443.10 euro. If the same example is calculated for a person liable for church tax, the savings increase to 480.90 euros. This is a premium of 8.5 percent. Apparently, an average was taken here between the two church tax rates of eight percent and nine percent (which does not exist in any state). But more importantly, when it comes to the special expenses of the church tax payer, his church taxes are completely disregarded.

This refunds church taxes that were not paid at all! For a civil servant with an annual salary of 30,000 euros, the tax savings range from -766 euros (i.e. 766 euros higher taxes) for a Bavarian calculator to 306.86 euros for a calculator from the Lower Rhine region, assuming the same (!) input.

Both values are of course wrong! It would also be important for the calculators on the BEG to correctly forecast savings for subsequent years to allow investment decisions to be made for better health or retirement coverage. Fortunately, there are examples. Among them are even advisory systems that directly incorporate upcoming tax savings to fund retirement savings.

Incidentally, these future tax savings by no means stem from the BEG alone and can easily amount to more than EUR 200,000 cumulatively. The multitude of bungling solutions with their very different results (in the same cases) does not help at all in upcoming pension investment decisions.

Rather, they are likely to reinforce the current crisis of confidence among financial services providers.

Dr. Johannes Fiala Dr. Wolfgang Drols

courtesy of

from (published in Versicherungsmagazin issue 12/2009, page 56)

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Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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