Overview

• The cabinet approved the bill and sent it to the Bundestag and Bundesrat, with implementation planned for January 1, 2026.
• Eligible employees past the statutory retirement age could earn up to €2,000 per month tax‑free from dependent employment, with the Progressionsvorbehalt waived.
• Employee contributions to health and long‑term care insurance would still apply, and employers would continue to pay pension and unemployment insurance contributions.
• Self‑employed workers, farmers, civil servants and minijobbers are excluded, drawing objections from freelancer groups such as VGSD over unequal treatment.
• The government projects about 168,000 users and roughly €890 million in annual tax revenue losses, with resistance brewing in the Union’s Junge Gruppe and a two‑year evaluation built into the draft.