Top meeting on the basic pension: allowance instead of means test?


The dispute has been going on for weeks, now it's time for a solution. The leaders of the coalition are discussing the basic pension at the Chancellery. A compromise is on the table, but the parties make again their red lines clear.
The tips of the Grand Coalition have come together in the Chancellery to settle the months-long dispute over the planned basic pension for low-income earners. Chancellor Helge Braun (CDU) and Labor Minister Hubertus Heil (SPD) will also participate in the meeting of party and parliamentary leaders of the CDU, CSU and SPD with Chancellor Angela Merkel (CDU) and Finance Minister Olaf Scholz (SPD). Low earners with at least 35 contribution years in the pension insurance should receive a pension supplement from 2021, so that their income is above the basic security. The Union wants to make the basic pension dependent on a means test, the SPD does not.

A working group under Braun und Heil had worked out a compromise model for the top round, which instead of a means test requires only an income check based on the tax office data. The basic pension would then be paid only up to a certain income tax deduction. The working group left open, however, how high the allowance should be and to what extent low pension entitlements would be increased. The SPD wants to ensure that at least 1.5 million pensioners benefit from it. The Union wants the costs to be less than two billion euros.

"An income test in terms of a tax allowance (…) could be a good compromise in terms of accuracy," said acting SPD chairman Malu Dreyer the "Frankfurter Allgemeine Sonntagszeitung". But she did not name details. CDU leader Annegret Kramp-Karrenbauer told the newspaper, "It's important for us to focus our efforts on those who need them, and to do so, access to the basic pension, that is, who should receive it, needs to be clarified is detected." Measures to strengthen occupational and private provision were also sensible and necessary, "so that we can already ensure today that old-age poverty will not even arise for the future," she added.

"Hubertus Heil Confetti Cannon"

The pension premiums from the federal budget are to be financed. Part of the project is expected to come from the planned financial transaction tax, with the Ministry of Labor being set up to a lesser extent. The SPD sees an agreement as an important condition for its party congress not to decide to quit the government in December. In the Union, especially the business wing of the parliamentary group penetrates to a strict means test, in order to limit the number of the receivers and thus the costs.

CSU regional group chief Alexander Dobrindt again attacked Labor Minister Heil. "The Hubertus Heil confetti cannon, with which he simply wants to distribute money, will not be fired," he told the "Bild am Sonntag". For a feasible means test, the Union had made a proposal to the SPD that was fair and accurate. "I hope that with the SPD reason with Sturheit stands."

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