Proposed revisions to Germany’s planned “active retirement” scheme are under discussion, aiming to enhance its appeal to older workers. The Christian Democratic Union (CDU), a major political party, is advocating for a significantly increased allowance before income becomes subject to taxation.
Currently, the planned legislation allows individuals to continue working after reaching the standard retirement age and earn a certain amount without impacting their pension benefits. The current draft allows for a tax-free earning of approximately 2,000 euros per month. However, the CDU is pushing for this limit to be raised, aiming for a total tax-free annual income of around 36,000 euros.
According to sources, this revised proposal would allow retirees to earn up to 3,000 euros per month tax-free, representing a 12,000 euro increase from the initially planned allowance. Furthermore, contributions to both pension and unemployment insurance would be waived for the earned income.
CDU parliamentarian and financial expert Fritz Güntzler stated the increased allowance is intended to provide a more attractive incentive for seniors to remain engaged in the workforce. Economic Minister Katarina Reiche, also of the CDU, has indicated support for the 36,000 euro annual allowance, characterizing it as a viable net income supplement for those participating in the active retirement program. The modifications are expected to be debated further as the legislation progresses.
