Germany: retirement pensions rise by up to 5.8%

An adjustment of the retirement pensions with which the benefits received in the west of the country and in the “Länder” of the extinct German Democratic Republic are finally equated has entered into force this Saturday in Germany.

In the western federated states, pensions rise by 4.39% as of today and in the eastern ones by 5.86%, with which the total equalization is finally reached -one year ahead of schedule.

The average pension stood at 1,022 gross euros per month in 2021, according to statistics from the German Pension Insurance (DRV), although with strong divergences between men and women and between the different regions.

“Rising wages and the strength of the labor market in Germany make this increase possible”declared in this regard the Minister of Labor, the Social Democrat Hubertus Heil, with respect to the adjustment that comes into force today.

Until now, the pensions of the approximately 21 million retirees in Germany were calculated differently depending on whether the person had contributed to the old west or the old east, although after a reform in 2018 a gradual adjustment process began.

Heil explained, according to a statement from the Ministry of Labour, that the equalization has been achieved ahead of schedule thanks to the rise in salaries – on the basis of which pensions are calculated – in the east, driven in part by the increase in the minimum wage up to 12 euros per hour.

In the fall of last year, the DRV had forecast an increase of 3.5% in the West and 4.2% in the East, so the increase that takes effect today is larger than expected.

Germany is in the process of gradually pushing its retirement age back to 67 until 2029, when those born in 1964 and older will no longer be able to retire before reaching that age without suffering cuts to their pension.

On July 1, a controversial health and dependency insurance reform also came into force, to which from now on people without children or with only one child must pay higher contributions.

Instead of 3% of salary as up to now, 4% will be deducted for those without children and 3.4% for those with only one, while 0.25% will be deducted for those with two or more. of your contribution.

This reform is intended to partially alleviate the precipitous increase in public spending on dependent elderly people, which rose from 21.920 million annually in 2011 to 49.080 million in 2021 due to the rapid aging of the population.

Source: EFE