Overview

• The German Institute for Economic Research has proposed a 10% levy on monthly pension income above €1,000 to stabilize the pay-as-you-go system.
• The surcharge would cover statutory, private and civil servant pensions as well as certain investment incomes to target the wealthiest 20% of retirees.
• DIW Berlin estimates that the levy could cut elderly poverty from roughly 18% to about 14% and boost incomes for the poorest pensioners by around 10%.
• Monika Schnitzer, head of the federal economic advisory council, has endorsed the concept while conservative ministers and trade unions label it punitive.
• Government officials are reviewing the proposal’s fiscal and legal implications but have not yet decided whether to adopt the surcharge.