Business Chancellery gives green light for draft basic pension

Chancellery gives green light for draft basic pension

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BMinister of Labor Hubertus Heil has been given the green light by the Chancellery to advance the basic pension for low-wage earners. The SPD politician sent his bill to the other ministries for voting on Thursday.

This is the prerequisite for the plan to be launched by the cabinet at the end of January. “Now we are targeting a timely referral to the cabinet,” Heil said. This is important so that around 1.4 million pensioners can benefit from the pension premium from January next year.

The heads of the CDU, CSU and SPD had agreed on key points of the basic pension in November. The pension supplement is intended to increase mini-pensions for low-wage earners if they have paid into the pension insurance scheme long enough.

The coalition had agreed on a 35-year contribution period as a minimum requirement. Heil now suggests a sliding zone starting at 33. The surcharge is to be paid in full up to an income exemption of EUR 1250 per month. Above these limits, 40 percent of income should be counted towards the basic pension.

In the draft, the cost of the basic pension is estimated to be around 1.4 billion euros in 2021. This is to be financed from taxes by a federal grant to the pension fund.

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