Coalition Cabinet Agrees to Increase Statutory Pension Level to 48 Percent
Coalition Cabinet Agrees on Joint Key Points
On Wednesday, the governing coalition of the German "traffic light" parties agreed on key points for the upcoming parliamentary session. Among other things, the monthly statutory pension level is to be raised to 48 percent in the future, thus relieving the burden on pensioners.
Statutory Pension Level to Gradually Rise to 48 Percent
The statutory pension level describes the relationship between the average pension and the average gross income of all employees subject to pension insurance. According to the coalition agreement, this level is to be gradually increased from the current 48.2 percent to 48 percent by 2026. This is intended to ensure that pensioners continue to receive an adequate pension despite demographic change.
The increase in the statutory pension level is part of a larger pension reform package that the coalition government is planning. This includes, among other things, the introduction of a basic pension for low-income pensioners and the strengthening of private old-age provision.
Other Key Points of the Coalition Cabinet Meeting
In addition to the pension reform, the coalition cabinet also agreed on other key points:
- The minimum wage is to be raised to 12 euros per hour from October 1, 2022.
- A 100 billion euro special climate protection fund is to be set up to finance investments in renewable energies and climate protection measures.
- The debt brake is to be tightened from 2023 onwards, with the federal budget having to be balanced once again.
The agreements of the coalition cabinet still have to be approved by the Bundestag.
