An innovative placement model for live-in caregivers in Germany

Starting Point: Demographic Change and the Role of Live-In Care

Germany is aging. The number of people in need of care is continuously rising, while the majority of care takes place in the home environment. Relatives continue to take on a large part of the care, but are increasingly reaching temporal, financial, and emotional limits. Outpatient care services are overburdened in many places, and skilled workers are lacking.

Against this background, so-called live-in care (also called "24-hour care" or "24-hour support") has become established. A caregiver, often from Eastern Europe, lives temporarily in the household of a person in need of care and takes on care, household tasks, and daily assistance. Exact numbers are missing, but estimates suggest hundreds of thousands of caregivers who work temporarily in German households each year.

What is clear: live-in care is part of the care reality. Equally clear, however, is that a significant portion of these arrangements are legally uncertain or clearly illegal. Typical are excessive working hours, missing rest periods, insufficient remuneration, informal employment, and constellations with a high risk of false self-employment.

Existing Employment Models and Their Weaknesses

In practice, four rough models have emerged. Each has specific legal, structural, and practical problems.

Posting Model

In the posting model, the private household, often through a German placement agency, commissions a company abroad that sends caregivers to Germany. The caregiver is either employed there or contractually bound as self-employed. The posting model makes up the largest part of the formal live-in market in Germany.

Formally, German minimum wage law and working time law also apply to posted employees. In practice, however, working hours are often stated too low, while extensive availability is expected in fact. This assumption is also shaped by terms like 24-hour care and leads to a misinterpretation of working hours. Decisions by German courts have clarified that standby times must also be counted as working time and must be remunerated with at least the statutory minimum wage.

Weaknesses:

• Working hours and remuneration often do not match on paper and in reality.
• Direction rights are often with the family in practice, not with the foreign employer.
• Legal and financial risks affect both caregivers and families and posting companies.

Self-Employment Model

In the self-employment model, the caregiver as a self-employed entrepreneur directly enters into a service contract with the household. Labor law provisions on maximum working hours or minimum wage do not apply to genuine self-employed persons; they negotiate their fees themselves.

At the same time, German law sets narrow limits for single-person self-employment when there is effectively only one client, the activity is highly personal, and takes place in the client's household. In many typical live-in constellations, caregivers are integrated into the family's daily routine, must follow their specifications, and have no real freedom regarding time, place, and manner of service delivery. These are classic characteristics of dependent employment.

Weaknesses:

• High risk of false self-employment if formal self-employment serves to circumvent social insurance obligations.
• Risk of later status determinations with retroactive payment obligations for social insurance contributions and taxes.
• Caregivers bear entrepreneurial risk but are often effectively in an employee role without corresponding protection.

Employer Model

In the employer model, the caregiver is directly employed by the person in need of care or their relatives. The household takes on all tasks of a regular employer. This includes registering the employment, paying taxes and social insurance contributions, and organizing the administrative processes around the employment relationship.

Since the household in the employer model takes on all rights and obligations of a regular employer, claims such as vacation, days off, and times of absence also arise. For these phases, the family must independently organize replacement care. In practice, this often leads to households resorting to additional solutions, such as parallel caregivers, short-term relief services, or switching to other models that can structurally better handle absences.

Weaknesses:

• High administrative burden for private households (registrations, accounting, replacement in case of absence).
• Rare in practice because effort and costs are too high compared to other models.

Informal Employment (Illegal Work)

Many live-in arrangements continue to arise in the informal sector. They are carried out without registration, without written contracts, and without contribution payments. Remuneration is often in cash, and working hours are informally agreed between caregiver and household. A major reason for this practice is that many households cannot meet the financial and administrative requirements of a regular employment relationship or shy away from the complexity of the associated obligations. In this way, a gray area arises where care is effectively provided but without legal security and without binding protection mechanisms for any of the parties involved.

Weaknesses:

• Complete legal uncertainty for all parties involved.
• No protection in case of illness, accident, or conflicts.
• High risk of criminal and regulatory consequences in case of discovery.

Summary Classification of the Models

The various models of live-in care differ significantly in terms of their legal structure, practical feasibility, and cost distribution. In many cases, the financial sustainability of households becomes a central limiting factor. At the same time, the level of remuneration and working conditions of caregivers determine whether a model is sustainable in the long term. The analysis shows that in several models, a significant portion of payments does not reach the caregivers themselves but flows to intermediate companies or placement agencies. This particularly affects the posting model, where foreign agencies and additional organizational levels make up a substantial portion of total costs, while the actually paid remuneration remains relatively low.

The self-employment model can fundamentally enable a structure where the financial relationship is more direct and fewer intermediate structures are involved. This can both reduce costs for families and improve the income situation of caregivers. At the same time, this model is associated with legal and organizational requirements that must be carefully considered. Genuine self-employment requires clear contractual boundaries, transparent processes, and a clear role distribution. If these prerequisites are not met, an increased risk of false self-employment arises with corresponding social insurance and tax consequences.

Overall, it shows that no existing model fulfills all requirements simultaneously. Legal security, economic sustainability, and appropriate working conditions often stand in tension. A future-proof approach must therefore aim to use the respective strengths of individual models and systematically address their weaknesses. This includes a clear definition of service relationships, transparent remuneration structures, and a framework that considers both the needs of households and the rights and professional autonomy of caregivers.

Legally Secure Self-Employment: Criteria and Challenges

Given the limits of classic employment relationships and the extent of informal employment, self-employment appears as a way out. However, for this to be legally secure, it must meet the distinction criteria from dependent employment.

Criteria for Genuine Self-Employment

In case law and at the German Pension Insurance, several central distinction criteria have emerged.

Characteristics of dependent employment:

• Direction-bound regarding time, place, and type of activity.
• Integration into the organization of the client, here the household.
• No significant own means of production or entrepreneurial risk.
• Essentially only one client over a longer period.
• Remuneration more like a salary than a fee.
• Typical employee rights are effectively granted (vacation, continued pay), although the contract claims otherwise.

Characteristics of genuine self-employment:

• Core freedom in scheduling working time and working methods within a contractually defined scope of services.
• No complete integration into the client's organization, but clearly defined services.
• Own entrepreneurial presence, such as through business registration, own external presentation, possible additional clients.
• Self-borne economic risks, such as in case of loss of orders.
• Own responsibility for social security.

The overall picture of the concrete activity is always decisive. Contracts that declare self-employment but in practice live an employment relationship do not hold legally.

Status Determination and Legal Consequences

To clarify the distinction, the status determination procedure of the German Pension Insurance has been established. Clients or contractors can have checked whether an activity is to be classified as self-employed or as employment.

If an allegedly self-employed activity is classified as employment, retroactive contributions to social insurance, possibly back taxes, and fines are threatened. For live-in care, this means: Models that only formally rely on self-employment without meeting the criteria in practice are highly risky.

At the same time, case law has clarified that care in the home environment can indeed be provided self-employed if the design supports this. There is no blanket ban on self-employed live-in care. The concrete design is decisive.

Core Elements of a Sustainable Self-Employed Live-In Model

From the analysis, core elements can be derived that a sustainable self-employed model must fulfill to be both legally and practically robust.

1. Clear Limitation of Direction Rights

The household can define goals and framework conditions (for example, which activities are taken on, rough care times, special features in dealing with the cared-for person). How the caregiver organizes their work within this framework must largely be left to them.

This means concretely:

• No rigid, unilaterally prescribed hour schedule by the household.
• No ongoing detailed instructions on process and execution.
• No disciplinary control as in a classic employment relationship.

Contractually, the direction right should be narrowly limited. The caregiver remains professionally and organizationally self-responsible.

2. Transparent Service Agreements

The service contract must clearly describe:

• Which activities are provided (for example, household management, daily companionship, support in basic care).
• In what time frame services are planned (daily and weekly framework).
• Which services are expressly not owed (for example, medical treatment care without qualification).

3. No Factual Integration into the Household

Even if the caregiver lives in the household, they must not be completely integrated into the family organism. Signs of too strong integration would be:

• Natural integration into all family processes.
• Expectation to take on tasks ad hoc at any time.
• Blurring of the boundary between professional role and family member.

Practically required are:

• A own retreat space with clearly regulated rest periods.
• Conscious boundary drawing between private family interactions and the professional role.
• Clarity that the caregiver is a service provider, not a full family member with implicit duties.

4. Flexible Time Management and Genuine Rest Periods

The model must enable that the caregiver:

• Can freely plan times when they are not available.
• Can leave the household without constantly being on call.
• Is able to design assignments, breaks, and vacation times self-responsibly.

In practice, this means that supplementary support services are necessary to close care gaps. A model that effectively requires constant availability is incompatible with self-employment and health protection.

5. Entrepreneurial Profile of the Caregiver

The caregiver should be recognizably entrepreneurially active, for example through:

• Business registration or comparable registration.
• Own design of remuneration and contract conditions within market-typical ranges.
• Possibility to work for various households over the year.
• Responsibility for tax and social insurance.

Without such entrepreneurial elements, self-employment quickly appears constructed.

The CAIR Model: An Attempt to Structurally Secure Self-Employment

Against this background, the CAIR model sets in. It understands itself as a placement and coordination framework for live-in care that consciously relies on self-employed activity of caregivers and, if needed, on a combination with various support forms.

Basic Principle: Self-Employed Caregiver with Digital Framework

In the CAIR model, caregiver and household directly enter into a service contract. CAIR provides the infrastructure for contract design, coordination of service scope, and documentation. The caregiver acts as a self-employed entrepreneur, CAIR is a placement and infrastructure provider, not an employer.

The caregiver acts as a self-employed entrepreneur. CAIR provides standardized building blocks (contract design, service description, documentation) that are oriented to the criteria for genuine self-employment and are intended to reduce status risks.

Central building blocks:

• Contract templates that consider the distinction from dependent employment.
• Support in clarifying tax and social insurance questions.
• Possibility to accompany a status determination procedure before the start of an assignment to increase legal security.

Digital Documentation and Coordination

Placement and coordination take place through a digital platform.

Core functions:

• Transparent insight for the household into provided services.
• Basis for invoicing and proof of agreed structures.
• Communication channel between household, caregiver, and optionally additional parties.

The platform should be perceived as creating transparency without establishing tight, employer-typical monitoring.

Integration into a Care Mix

live-in care can function both as an independent solution and be meaningfully embedded in a broader care system. Many households benefit from combining various support forms, while others already achieve stable care with well-organized live-in care.

An extended care mix can include, for example, the following elements:

• Support through outpatient care services for medical and nursing tasks.
• Supplementation through relatives, neighborhood help, or voluntary services.
• Use of technical assistance systems such as emergency call systems or daily assistance.
• Combination of state benefits such as care allowance and care benefits in kind, which specifically help to flexibly combine various care building blocks.

Such a mix can relieve the caregiver and clearly structure certain tasks. At the same time, it remains possible that a live-in caregiver within defined activities also ensures continuous, comprehensive care without additional partners, provided the household's needs allow this.

Coordination and Support

CAIR envisions the role of a coordination force or a coordinative instance that:

• Supports families in planning an overall arrangement.
• Advises caregivers, for example on self-employment, work organization, and boundary of their role.
• Can act as a mediator in conflicts.

This is intended to prevent a formally clean model from gradually becoming an informal or exploitative arrangement in practice.

Limits, Open Questions, and Framework Conditions

Even the self-employment model as with CAIR does not solve all problems.

Financing

Legally secure live-in care with limited deployment times and supplementary services will be more expensive than informal models with effectively unlimited availability. Without additional public financing or tax incentives, there is a risk that legal models are only economically accessible for a portion of households.

Possible starting points:

• Expansion of existing care benefits in kind and combination possibilities.
• Purpose-bound promotion of legal live-in models analogous to services for daily support.
• Better tax consideration of household-related care services.

Social Security of Caregivers

Self-employed caregivers must organize their social security independently. This concerns health insurance, pension insurance, accident insurance, and possibly insurance for disability.

For self-employment not to come at the expense of security, it needs:

• Information and advice for caregivers.
• Contribution-side sustainable models that account for the income situation.
• Possibly legal adjustments or specific framework models for solo self-employed in care.

Workload and Health Protection

Formally self-employed caregivers are not directly subject to working time law. Factual overload remains a problem if it is not clearly addressed culturally and contractually.

Necessary are:

• Contractual limitation of the time scope of services.
• Awareness in families that a single person cannot provide permanent availability.
• Accompanying quality assurance, for example through regular conversations and feedback loops.

Information and Advisory Needs

Both families and caregivers need orientation:

• Which models are legal?
• What do self-employment and the associated duties mean concretely?
• How can a legally secure and simultaneously practically functioning arrangement be designed?

Here, in addition to platforms like CAIR, particularly neutral advisory centers, care support points, and consumer organizations are needed. They can help reduce unrealistic expectations and enable informed decisions.

Outlook: Austria as an Example of Formal Regulation

A look at Austria shows that live-in care can also be organized in an explicitly regulated framework. There, self-employed care has been legally anchored since 2007, the activity is officially recognized as "person care," is defined as a trade, and is tied to certain prerequisites. Germany currently offers no comparable legal clarification. Families receive targeted state support that is specifically oriented to live-in care, while German benefits such as care allowance are rather general and were not tailored to this model. The market in Austria is more formalized, with fewer intermediate structures, clear quality requirements, and binding registration processes. These findings make clear that Austria provides valuable hints on how a structured, transparent, and legally compliant system could fundamentally be built. Decisive would be to avoid existing weaknesses and design legal protection mechanisms significantly stronger.

These differences show that a regulated framework can offer both caregivers and families more security while keeping costs in a bearable range. For Germany, this creates a perspective on how live-in care could be made fairer, clearer, and more sustainable in the long term.

Conclusion

live-in care will continue to play an important role in the care of people in need of care in Germany given demographic change. The analysis of existing employment models shows that many of the solutions widespread today are based on legally uncertain or clearly illegal constructions and are associated with high risk for caregivers and families.

A model of legally secure self-employment can open a path to bring live-in care out of the gray area. Prerequisite, however, is that the criteria of genuine self-employment are not only met on paper but in practice. This means clear distinction from direction-boundness, transparent service agreements, conscious limitation of working hours, integration of supplementary services, and a strong role of coordination and advice.

The CAIR model is a proposal for what such a self-employed, digital, and coordination-supported live-in system could look like. Whether it can establish itself broadly depends on several factors: political will, financial framework conditions, willingness of households for fair conditions, and the building of structures that support caregivers in their entrepreneurial role.

What is clear: A continuation with largely unregulated round-the-clock availability is neither legally nor ethically sustainable. Models like CAIR show that alternatives are conceivable that both secure the care of people in need of care and take seriously the rights and health of caregivers.