Overview

• Ministers are expected to approve the draft on Wednesday, with the coalition aiming for a 1 January 2026 start pending swift passage in Bundestag and Bundesrat.
• Eligible retirees could earn up to €2,000 per month tax-free after reaching the statutory age, with the relief applied directly in payroll and without a Progressionsvorbehalt effect.
• Only employees in social‑insurance jobs qualify, excluding the self‑employed, freelancers, many farmers, Beamte and anyone retiring before the regular age.
• The finance ministry’s draft forecasts about €890 million a year in lost tax revenue for federal, state and municipal budgets, while health and care insurance contributions on earnings would still be due.
• The measure is to be limited and reviewed after an initial period reported as two to three years, drawing legal and equity criticism from unions, employer groups and associations for the self‑employed and journalists.