Germany's pension reforms spark outrage over cuts to sick pay

Ahead of Wednesday's cabinet meeting and amid the debate over healthcare reform, the German Social Association (SoVD) has sharply criticized Health Minister Nina Warken's (CDU) proposals.

In an interview with newspapers of the Funke Media Group (Monday), SoVD President Michaela Engelmeier stated: "Everyone in this country knows that our extremely expensive yet underperforming healthcare system is in desperate need of reform. Some good approaches have been put forward. But what remains deeply problematic is that the government is failing to address its own biggest cost-cutting opportunity: it must fulfill its obligation and fund the billions in contributions for people on basic welfare from tax revenues." She emphasized that this was a societal responsibility and could not be shouldered by statutory health insurance contributors alone.

Engelmeier also condemned plans to partially abolish the contribution-free co-insurance for spouses, calling the move "completely wrong." She argued that this provision was a cornerstone of the solidarity principle, particularly benefiting low- and middle-income households. "Eliminating it would place an even greater burden on these families," she said, noting that even the exemption for children under seven would do little more than soften the blow.

She described proposed cuts to sick pay as "utterly incomprehensible and socially highly concerning," branding them "deeply unsolidary." "While privately insured individuals and civil servants continue to receive generous benefits, those in public health insurance are being asked to tighten their belts," Engelmeier said. The SoVD urged the federal government to "hit the brakes" on these plans during Wednesday's cabinet meeting.

Engelmeier also took aim at Chancellor Friedrich Merz's (CDU) pension proposals: "The chancellor must stop undermining confidence in the statutory pension system by talking it down—it's scaring millions of people. The truth is, the statutory pension is far more robust than its reputation, especially compared to how the insurance industry portrays it."

She dismissed as "completely unacceptable" the chancellor's attempt to preempt the work of the Pensions Commission. "We cannot allow a mandatory insurance system to cover only the bare minimum while pushing people toward the far riskier capital markets for their retirement security," Engelmeier warned.

For millions, the statutory pension remains the most important—or even the only—source of income in old age, she told the Funke Media Group. "And that won't change as long as millions have nothing left at the end of the month to save privately, given rising living costs. Despite the need for reform, Germany's statutory pension system is a proven, stable, and effective model." She called for targeted measures to strengthen it, including labor market improvements and a long-term increase in the pension level to 53 percent.

At the German Banking Association's annual reception on Monday, Merz had declared that the statutory pension would, at best, provide only basic coverage in the future—a statement backed by his party. Speaking at the Christian Democratic Employees' Association (CDA) conference in Marburg on Saturday, Merz stood by his remarks but clarified his position.

While affirming that the statutory pension would remain the foundation of the retirement system—and that he had no intention of scaling it back—he argued that the debate could no longer focus solely on maintaining benefit levels. Instead, he said, all three pillars—statutory, occupational, and private pensions—must be rebalanced to create a new, sustainable relationship.