Germany's 'Active Pension' Sparks Fairness Debate Among Retirees and Self-Employed
The active pension, a tax relief scheme for retirees, has sparked debate in Germany. While it's exclusively for those who've reached regular retirement age, concerns arise about its fairness, particularly for the self-employed. Retirees may soon enjoy tax-free earnings of up to €2,000 per month, but the scheme is estimated to cost around €2.8 billion in lost tax revenue annually.
Caritas president Peter Neher has cautioned against escalating the debate, warning against further polarisation. The active pension, set to begin in 2026, allows retirees to earn up to €2,000 per month tax-free. However, critics argue it discriminates against self-employed individuals who often work beyond retirement age. There's no clarity yet on how a potential 'Merz-Kabinetts' might support the self-employed in this context.
The active pension is not a state subsidy but a tax relief on one's own earned income. Only contributions to health and long-term care insurance will be deducted. However, a childcare worker topping up hours faces full taxation on additional earnings, seen as unfair by some.
The active pension, estimated to cost around €2.8 billion in lost tax revenue annually, is a contentious issue. With more than half of the population willing to work longer due to old-age poverty concerns, the debate on its fairness and impact continues. As the scheme's implementation nears, discussions on its potential reforms and the support for self-employed individuals remain open.
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