A planned pension reform, dubbed “Aktivrente” and slated to take effect in 2026, is facing potential legal challenges based on concerns raised by the German Institute for Economic Research (DIW). The reform, which grants retirees a more favorable tax treatment, is being scrutinized for possible conflict with Germany’s Basic Law, the nation’s constitution.
According to Stefan Bach, DIW’s tax expert, the “Aktivrente” creates a discriminatory situation. He anticipates legal action and suggests the Federal Constitutional Court may ultimately be required to rule on its legality. Bach acknowledges a possible justification for the preferential tax treatment if demonstrably linked to fostering economic growth within the country.
Hanno Kube, a constitutional law professor at Heidelberg University, shares these concerns, describing the “Aktivrente” as posing a significant constitutional issue that demands a compelling justification. While a rationale based on incentivizing continued employment amongst older citizens could be considered, doubts remain.
Professor Kube further highlighted the potential for substantial unintended consequences and raised questions regarding the reform’s interaction with the existing statutory tax allowance. The legal and economic implications of the “Aktivrente” remain under close observation as its implementation approaches.
