From 2026, active retirement will be available to most, except for one specific group who are deliberately being left out.
Federal Government Introduces Active Pension to Boost Working in Old Age
The German federal government has announced plans to introduce the Active Pension, a new initiative aimed at making working in old age more attractive. The measure is scheduled to begin on January 1, 2026.
The Active Pension is designed to encourage employees to continue working beyond the statutory retirement age. However, it will not apply to those who retire early. The draft bill for the Active Pension measures, obtained by the magazine Spiegel, suggests that only employees will be eligible for the Active Pension initially, with self-employed individuals being excluded.
The Association of Founders and the Self-Employed Germany (VGSD) has reacted angrily to the federal government's plans for the Active Pension. Andreas Lutz, the chairman of VGSD, called the plans a 'slap in the face' for self-employed individuals. Lutz believes that taxing people of the same age differently due to their decision to be self-employed in old age is a form of discrimination and restriction of free vocational choice.
Lutz also believes that the Active Pension plans contradict the principle of equal treatment enshrined in the Basic Law. He argues that it is constitutionally questionable if people above the statutory retirement age are to be taxed differently than younger ones.
The Active Pension has sparked debate and criticism. Anja Piel, a board member of the German Trade Union Confederation, expressed concerns that the Active Pension would primarily benefit office workers and self-employed individuals. She fears that it may widen the gap between these groups and other sectors of the workforce.
Steffen Kampeter, the head of employers' association, has also raised concerns about the potential cost of the Active Pension for taxpayers. According to estimates by the magazine Spiegel, around 25,000 skilled workers are expected to use the Active Pension offer annually.
The CDU General Secretary Carsten Linnemann stated that the Active Pension is intended to make working in old age more attractive and combat skills shortage. He believes that the measure will help to address the issue of an aging population and ensure that Germany remains competitive in the global economy.
Despite the controversy, the Active Pension is set to become law on January 1, 2026. It remains to be seen how the measure will impact the workforce and the economy in the long term.
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