Millions in Germany Reap Benefits from Improved Basic Pension

More than a million people in Germany have seen their retirement incomes boosted, with women and those in the former East benefiting the most.

Basic Pension Boost Aims to Help Those Who Contributed but Lack Entitlements

• Average monthly increase: around 97 euros
• Beneficiaries: 1.27 million people in 2023

The basic pension, a supplement to the statutory pension for those with low entitlements despite long contributions, has been strengthened, as shown in a study by the University of Regensburg for the federal government. This targeted approach, according to Labor Minister Bärbel Bas (SPD), ensures that those who have paid into the system but have low pensions can now receive additional support.

Women and Eastern Germans See Greatest Gains

• More than four out of five beneficiaries are women
• Those in the former East receive lower average supplements

Women, particularly in the new federal states, have seen significant improvements. This is largely due to the recognition of child-rearing years, which count towards pension entitlements. However, only 6.21% of old-age pensioners receive the supplement despite being entitled, as income is taken into account.

Basic Pension: A Step Towards Gender Pension Parity

Women continue to take on a disproportionate share of child-rearing, which is recognized in the basic pension calculation. Almost one in five old-age pensioners meet the eligibility requirements, while this applies to only a small proportion of men.

– Study by the University of Regensburg

Areas for Improvement: Income Thresholds and Partners’ Incomes

• Only 50.5% of eligible individuals receive the supplement
• Partners’ incomes often prevent the basic pension surcharge

While the basic pension has improved retirement incomes for many, there are remaining challenges. Income thresholds and the consideration of partners’ incomes often prevent those entitled from receiving the supplement. The government is committed to addressing these issues and fostering pensions based on lifetime achievements and hard work.

Government Promises Further Reforms by Mid-Year

Minister Bas has assured that the government will continue to focus on people who have worked hard, with a government commission’s recommendations for further pension reforms expected by mid-year.

Source: Study by the University of Regensburg for the Federal Government

FAQs

• Who is eligible for the basic pension? Those who have paid into the statutory pension insurance for at least 33 years and have low entitlements.
• How much is the average basic pension increase? Around 97 euros per month.

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