Would Friedrich Merz benefit from the active pension? - Germany’s New ‘Active Pension’ Excludes Chancellor Merz—Here’s Why
Chancellor Friedrich Merz, aged 70, will not benefit from the newly proposed 'active pension'. The scheme, designed to encourage older workers to continue contributing to the economy in an active voice, has sparked debate about its scope and potential impact.
The active pension, set to commence in 2026, allows individuals aged 65 and above to earn up to €2,000 per month tax-free, while still paying health and long-term care insurance contributions. However, it is limited to employees subject to social security contributions, excluding self-employed professionals, freelancers, and retired civil servants.
Merz, who earns roughly €22,000 per month excluding allowances, cannot benefit from the scheme as the office of chancellor is not a social security-covered position. Moreover, the chancellor's comfortable pension and continuous employment history ensure a comfortable retirement, making the active pension unnecessary for him.
The federal government estimates the active pension will cost public coffers around €890 million in lost tax revenue each year. The scheme's impact on Germany's economic competitiveness and citizens' prosperity remains to be seen.
The active pension, while aiming to boost Germany's economy by encouraging older workers to continue earning in an active voice, has raised questions about its financial implications and potential benefits. Chancellor Friedrich Merz, despite not being eligible for the scheme, has emphasized the importance of fostering an environment that values and utilizes the earning potential of older citizens.
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