In the end, the months-long dispute became an existential threat to the coalition. But now the compromise on the basic pension. A compromise that was welcomed by most politicians of the governing parties – but also provoked criticism.
The Grundrentenpläne did not go far enough, complains about the opposition from the Left Party and the Greens. On the other hand, business associations and also parts of the Union criticize that the concept would constitute a system crash in the pension insurance and violate the ironic principle that the payments must be based on the amount of the deposits. And many critics agree that the basic pension will not be enough to effectively combat old-age poverty.
But how would the planned rent actually work? Here it can help to look at concrete examples.
Simplified, the basic pension should work like this: in full they should only get pensioners who have accumulated at least 35 years of contributions. Pensioners with slightly shorter contribution years must expect discounts.
For each year of contributions, there are a certain number of salary points – depending on the income level. Anyone earning as much in their working life as the average earner accumulates exactly one salary point in one year – correspondingly more for a higher salary, and correspondingly less for a lower salary. For example, if you had a salary of 75 percent of average earnings, you earned 0.75 points in one year.
Pension insurance automatically checks how many earnings points have been collected on average. If there were less than 0.8 salary points per year, the pension insurance checks in the next step, the taxable income: If it is single persons over 1250 euros and for couples over 1950 euros, there is the basic pension is no longer in full, but only with discounts – and from a certain income limit no more. How high this limit will be and how high the discounts will be, is still unclear.
If a claim to the full basic pension exists, the earnings points will be doubled – but only for 35 years of contributions and at most 0.8 points. Subsequently, 12.5 percent of this surcharge will be deducted. In the maximum, the surcharge can currently reach 404.86 euros in the west and 390.65 euros in the east.
Currency of pensioners
If, despite this supplement, basic pension recipients do not exceed the basic security level, they should receive an improved housing allowance and – as a last resort – a basic allowance. This ensures that they always have more money available than someone who has never worked. (A detailed explanation of the model can be found here.)
The salary points are the currency of the statutory pension, so to speak: An average earner collects exactly one salary point per annum on his retirement account. For each salary point there will be a certain amount later, which will be adjusted annually. Currently, this is 33.05 euros in the west and 31.89 euros in the east.
But what does the new basic pension actually mean for the people? Even though some details have not yet been clarified – such as the crediting of Riester pensions or the glide zones for contribution years and income – it can already be said that the effect of the basic pension differs greatly depending on the life situation.
Four notional calculation examples:
Example: Nanny and geriatric nurse, 71 and 73 years old, 36 pension years, two children, married Residence: Aurich
The pensioner is married to a former work colleague. She has been working full-time for 31 years at a low salary and is credited with five additional years of contributions for the two children born before 1992. Her husband also worked full time at low pay as a geriatric nurse for more than 34 years, then became unemployed until retirement. He also has 36 contribution years.
On average, both spouses have accumulated 0.6 compensation points per insurance year. This results in a monthly pension of currently € 713.88 each. Together they have pension income of gross 1427.76 euros, after deduction of health and long-term care insurance net 1272.85 euros.
The retiree had inherited her birth house and a condominium. In the house lives the couple themselves, the condominium is rented. As a result, the couple has rental income of 370 euros.
Your total net income is therefore 1642.85 euros. The own housing costs including heating 480 euros. After deduction, they have 1162.85 euros available in the month.
Change due to the basic pension: Both spouses have full claim – the assets in the form of their own home and the condominium is not taken into account, and the income is below the limit of 1950 euros for couples. The retirees receive a supplement of 0.2 points each for 35 years of contributions in the first step – ie each a total of 7 salary points. That corresponds to 231.35 euros. In the second step, 12.5 percent of this supplement will be deducted, ie, at the end, it will amount to 202.43 euros for each spouse. Overall, the couple now gets 1832.62 euro pension. Of these, they still have to pay 198.94 euros for health and long-term care insurance, they remain 1633.78 euros net. Together with the rental income and after deducting the housing costs, they now have 1523.78 euros available.
Household income (after housing costs): before basic pension: 1163 euros after basic pension: 1524 euros
Example: nurse, 68 years, 35 pension years, two children, married
The retiree is married to a radiologist who has been working part-time for 30 years in their practice – 15 hours a week. Five additional contribution years are credited to the man for the two children born before 1992.
On average, the retiree has accumulated 0.4 earnings points per insurance year. This results in a monthly pension of currently € 462.70. After deduction of health and long-term care insurance as well as taxes, about 300 euros remain net.
His (jointly taxed with him) wife receives from the pension of physicians and a private pension insurance monthly net 4500 euros. The couple lives in a paid-up condominium worth 1.2 million euros, the monthly housing costs 485 euros.
Change due to the basic pension: None. Since the couple is well above the income tax allowance of € 1950 a month, there is no entitlement to a basic pension – although the man has accumulated enough contribution years and even draws a strongly below-average pension. Without the income test, the man would have received the maximum possible supplement of around 405 euros per month.
Household income (after housing costs):
in front of ground rent: 4315 Euro per month Basic pension: 4315 Euro
Example 3Seller, 71 years, single, 29 years of pension contributions Residence: Munich
The pensioner is currently dependent on the basic pension in old age. His claim adds up to 945 euros a month (455 euros cold rent + 65 euros heating costs + 424 euros standard rate).
After some years of self-employment, he worked a little more than 27 years full-time and paid into the pension fund, then became unemployed, then slipped to retirement pension in Hartz IV.
On average, the pensioner accumulated 0.7 earnings points per insurance year. This results in a monthly pension of currently € 670.92, which is fully deducted from its basic security.
Change due to the basic pension: probably none. The condition of 35 contribution years for the receipt of the full basic pension is in any case not fulfilled. Even for a basic pension with discounts the 29 contribution years are unlikely to be enough – but this detail of the basic pension has not been decided yet.
Household income available (after housing costs): before basic pension: 424 euros
after basic rent: 424 euros
Example: 4-year-old assistant, 78 years, two children, single parent, 42 years of pension contributions
The pensioner is currently dependent on the basic pension in old age. Their claim adds up to 739 euros a month (270 euros cold rent + 45 euros heating costs + 424 euros standard rate).
She has been working full-time for five years. She is credited with five additional years of contributions for her children born before 1992. The remaining 32 contribution years result from a part-time employment over 20 hours in the week.
On average, the retiree has accumulated 0.47 points per insurance year. This results in a monthly pension of currently € 652.41, which is fully deducted from their basic security.
Change due to the basic pension: In the first step, the pensioner receives an allowance of 0.33 points for every 35 years of contributions – for a total of 11.55 points. That corresponds to 381.73 euros. In the second step, 12.5 percent of this surcharge will be deducted, ie at the end it will be 334.01 euros. Overall, she gets now 986.42 euros pension. Of that she still has to pay 107,03 Euro health and long-term care insurance, so she stays 879,39 Euro net. After deducting the housing costs she still had 564 euros available – 140 euros more than the 424 euros standard rate with which they had to make do so far. Nevertheless, this is not the variant that secures most of the pensioner's money.
Change through the allowance in the basic security: The pensioner would be even better if she continued to apply for the basic pension in old age – even if she regularly has to disclose her income and assets without gaps. Because the newly created allowance for pensions long-term insured provides that in addition to the basic protection of the first 100 euros of their pension may be kept full of every other euro of their pension 30 cents – up to a cover that at half the standard rate (currently: 424 Euro). Currently, the pensioner should therefore keep 212 euros of their pension in addition to the standard rate and would thus have 636 euros available – 72 euros more than just with the basic pension.
Household income available (after housing costs): before basic pension: 424 euros with basic pension: 564 euros with allowance in the basic security: 636 euros
Conclusion: The examples make clear what different effect the land rent should have, as the Grand Coalition has now decided. It can noticeably improve the situation of long-term contributors, who are currently barely making ends meet – such as the geriatric nurse couple from Aurich. The additional regulation on the allowance in the basic security can even create a situation in which those affected must decide whether they want to live without restraint from the office alone with the basic pension – or remain in the basic security and purely material even better. Although the access restrictions exclude well-off seniors from the basic pension anyway, they probably also mean that the seller will continue to live at the Hartz IV level even after 29 years of contributions.