Overview

• The finance ministry’s bill is slated for cabinet adoption on Wednesday, with a January 1, 2026 start and payroll implementation so the exemption applies directly in monthly pay.
• Earnings up to €2,000 per month from employment after reaching the regular retirement age would be income‑tax free and would not trigger a higher tax rate on other income because the progression rule is removed.
• Eligibility is limited to socially insured dependent employment, excluding the self‑employed, many freelancers, farmers, civil servants, most minijobs, and anyone drawing a pension before the regular age.
• A government draft projects about €890 million a year in tax shortfalls shared by federal, state and municipal budgets, while health and long‑term care contributions would still be due and voluntary pension contributions remain possible.
• Reports indicate the measure will be time‑limited and reviewed after a short period, and stakeholder backlash plus dissent from the Union’s youth group over the broader pensions package could shape or slow the final law.