Overview
- The proposal would allow pension‑age employees to earn up to €2,000 per month tax‑free from January 2026, with social contributions still due and eligibility limited to socially insured employment.
- Bertelsmann/DIW modeling projects about 25,000 to 33,000 additional full‑time equivalents among 66‑ to 70‑year‑olds, after a survey found a five‑percentage‑point drop in those unwilling to work after retirement under the tax break.
- The reform would only break even fiscally at roughly 40,000 extra full‑time positions, compared with the Finance Ministry’s estimate of around €890 million in annual foregone income tax.
- Employers report limited active recruiting of retirees and cite legal uncertainty and age‑unsuitable roles; the package also plans to allow fixed‑term hiring of retirees without cause from 2026.
- Critics note exclusions for civil servants, many self‑employed, farmers and KSK‑insured freelancers as petitions press for inclusion, while the cabinet backed higher 2026 contribution ceilings and the pension insurer warned of a rate jump from 2028.