The Pension 'Supplement'

This weekend meeting between the CDU and SPD Parties concluded....so the pension reform is mostly written in draft form now.

For those who haven't followed the last couple of years....there are a fair number of Germans in retirement status....making a marginal amount of income (even below poverty status). 

The chief reason?  Well....they worked at low paying jobs, and their contribution into the pension pot meet current requirements but the cost of living over the past thirty-odd years has been increasing.  You have Germans retiring now, and getting only 500 Euro, which isn't enough to live. 

You can blame this on the folks themselves....they stuck to low-paying jobs.  You can blame the pension system which just isn't built for modern times.  And you can blame politicians for just sitting there for almost a decade and talking about the problem but never doing anything to resolve it.

The deal?  You get a 'supplement'.....on top of your pension.

You have to have 35 contribution years, where your contribution is less than 80 percent but more than percent of the average income.  This would bring you to around....an income tax allowance of 1250 Euro for a single person, and 1950 Euro for a couple. 

Number of people affected?  Right now, they are saying 1.2 to 1.5 million. 

But the curve on this?  None of this 'extra' supplement will start until 2021....roughly 13 months away.  For the sake of the discussion, that's the election year (in the fall).

Cost?  1-to-1.5 billion Euro. 

The end of this problem?  Well....you still have the welfare crowd and their complaint about the low sum of money that they get. 

Also, lets go and admit it....the pension 'tax' isn't exactly covering the marginal wage earners, but no one says much over resolving that....just pumping more tax revenue toward the problem.