Will savings affect my pension?

The three most important points about the basic pension: amount, entitlement, introduction

The amount of the new basic pension varies

If the income and assets of retirees are insufficient to support themselves, they are entitled to them Basic security in old age. The social benefit provides for a regular requirement and covers it beyond that Expenses for rent, heating as well as care and health insurance contributions. The statutory pension and assets are counted towards the basic security, with an allowance of 5,000 euros according to the Federal Ministry of Labor. Since 2018 there has also been an exemption for pension payments from a state-sponsored private pension scheme such as the Riester pension.

It was originally discussed that the Basic pension ten percent above the regional basic security requirement should lie. The basic security varies depending on where you live, as it is linked to the cost of living and rents on site. It would therefore have been difficult to make a general statement about the amount of the basic pension. The nationwide average need for social benefits is currently around 800 euros per month. The basic pension is therefore included on this basis 880 euros.

The current compromise now providesthat the pension entitlement is doubled. However, it must not be higher than 80 percent of the pension that an average earner has earned after 33 years of contributions in the statutory pension insurance. A further 12.5 percent will be deducted from the surcharge.

Specifically, this could mean the following: As a hairdresser, Martina Musterfrau earned 40 percent of the average income for 40 years. She would be paid a statutory pension of 528.80 euros. According to Welt, the basic pension will result in 933.66 euros per month.

ZDF Wiso has another example ready. Accordingly, a pensioner would be entitled to a pension of 648 euros. The basic pension would increase the payout to a maximum of 890 euros.

These are the requirements for the basic pension

For the solidarity-based life benefit pension, which was to be implemented in the previous legislative period, those entitled to benefits would have had to prove that they had paid contributions to the statutory pension insurance for at least 40 years. For the new basic pension should now 33 contribution years sufficient, whereby times are taken into account when those affected Relatives cared for or for the raising children have taken a break.

Another requirement was one Been means testas is the case with basic social security. This has now turned into a simplified income test that is supposed to happen automatically. This means that anyone who is entitled to the basic pension does not have to apply for it. The only requirement is that the tax office has a current tax return in order to be able to check the relevant data.

Earlier proposals on the minimum pension also provided that the benefit was linked to whether the recipient had a past provided for their retirement with a private pension plan to have. The current agreement between the Union and the SPD does not contain such a condition for the basic pension. It remains to be seen whether renegotiations will take place at this point.

Criticism of the basic pension: Will not prevent old-age poverty

Around one million people are currently receiving basic security in old age. However, due to the originally planned requirement of 35 contribution years, the Parit├Ątische Gesamtverband estimates that only around 20 percent of poor and old people are entitled to the minimum pension will have. With the new 33 years there will be more. But not everyone will benefit from the basic pension.

Compared to ZDF WISO, managing director Ulrich Schneider also criticized the amount of the pension increase. Basic security in old age is already 40 percent too low to prevent poverty. The basic pension cannot therefore counteract old-age poverty.