The payment of the basic pension in Germany has started. However, not all retirees with low incomes benefit from it immediately.
- With the basic pension, the pension of many retirees should increase significantly – at least that is the hope
- But the reality is different: Many
- The basic pension should give millions of retirees significantly more pension money
- But it arouses false hopes because not all low-wage earners benefit
- Many go away empty-handed at least at first – we show which pensioners are involved
The first retirees have surcharges on their retirement benefits from the Basic pension obtain. In July, the German Pension Insurance (DRV) had already sent the first notices to those entitled.
But some retirees will come to terms with the Payout their surcharges have to be patient until 2023. It is not the only point of criticism of the current basic pension scheme.
Basic pension: does it turn out to be a bureaucratic monster, as feared?
That some Pensioners Having to wait more than a year for their basic pension entitlements to be paid is due to the high level Administrative burden during the examination by the DRV. What this already pointed out before the corresponding law came into force on January 1, 2021.
There are around in Germany 26 million Pensioners whose possible entitlements to a basic pension need to be checked. Because of the inclusion of data on income, this is also done in a complicated cooperation between the DRV and the tax office. Employers’ associations and opposition politicians had already had one before the introduction Bureaucracy monster warned.
Basic pension: No entitlement to a review until 2023
First, the DRV checks the claims of new retirees. Then follow after a certain series everyone who was already retired in 2020. All pensioners who are already receiving social benefits or basic social security are preferred. In addition, there are pensioners who already exist 1992 have retired and a further fifth of all existing pensions should be able to be processed. A further fifth should then be processed per quarter. If the plan works, the exam will be finished by the end of 2022.
Precisely because the administrative effort at DRV is so high, it may not help any affected people Application for examination of the basic pension supplement. Because the claim is suspended until January 1, 2023. Means: The DRV can reject such applications without giving reasons. This is to ensure that the specified order does not get mixed up and thereby Extra work arises.
The entitlements to the basic pension do not expire if the review takes longer. They then apply retrospectively. So the money is not gone, but sometimes comes for years delay.
Basic pension: does it really help against poverty in old age?
There is also criticism of the Calculation criteria of claims. Because basic pension is only given to those who have paid into the pension insurance for at least 33 years and have earned a minimum of 30 percent and a maximum of 80 percent of the average income.
Indeed Low wage earnerswho, for whatever reason, have worked “only” for 32 years and 364 days, for example, get nothing. In the event of an emergency, you are still on the Basic security reliant. The basic pension therefore by no means consistently ensures more social justice and fails to achieve its goal of combating poverty in old age, criticize employers’ associations such as Gesamtmetall. The Council of Economic Experts also comes to his Annual report 2020/2021 to a clear conclusion: “The basic pension is altogether a little targeted instrument around Old-age poverty to address. “
Basic pension: administrative effort eats up a lot of money
As with the statutory pension, the basic pension is not financed solely by the contributions paid. That is why the federal government has to go along with it Tax funds help out. For the year 2021 alone, the Ministry of Labor from Hubertus Heil (SPD) estimates the cost of the basic pension at 1.3 billion euros. They could rise to 1.6 billion euros by 2025. Criticism flares up at these sums, especially in connection with the administrative effort.
The costs for this alone are estimated to be around for 2021 400 million euros. Last year, DRV director Stephan Fasshauer already pointed out the poor ratio compared to the total expenditure. According to Fasshauer, the DRV usually has administrative costs of 1.3 percent of total expenditure. However, the administrative costs for the basic pension “will be in the build-up phase 24 percent of the total expenditure. “Even if the administrative costs in the following years fall to the estimated 200 million euros annually, that would still correspond to a share of 13 percent.
Basic pension: Financing through transaction tax failed
There is criticism not only of the costs, but also of the question of financing per se. Because the tax money spent should also be counter-financed somehow, provided you don’t want to go into debt. Finance Minister Olaf Scholz (SPD) originally had income from a newly introduced Financial transaction tax intended. But the SPD candidate for chancellor failed this year due to resistance from several EU countries.
It remains to be seen whether the new Federal government for example through a reform of the Riester pension or the introduction of a share pension based on the Swedish model Pension system can otherwise relieve the burden in order to solidly counter-finance the basic pension. Read about it: So the pension could be reformed in a traffic light coalition
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