After Corona only 4.4 percent plus: the traffic light applies the pension brake

After Corona only 4.4 percent plus
The traffic light hits the pension brake

The corona pandemic is also affecting German pensioners: They will have to forego an increase in 2021. After the zero round, an equalization should come, but not as lavishly as promised. The traffic light parties ensure that an earlier correction rule takes effect again.

The around 21 million pensioners in Germany must expect that the pension increase next year will be a little lower than expected. “The forecast was 5.2 percent. Now I expect pensions in Germany to rise by 4.4 percent from July 2022,” said Federal Labor Minister Hubertus Heil from the SPD of “Bild am Sonntag”. “It’s still very neat.”

The reason for this is that, according to the report, the traffic light coalition wants to reintroduce the catch-up factor. The prospective new Chancellor Olaf Scholz introduced it as Federal Minister of Labor in the financial crisis of 2008 to compensate for the pension guarantee. This ensures that if wages fall in a crisis, pensions do not have to be cut as well. If wages rise again, the catch-up factor should ensure that the pension cut that has not been implemented is compensated mathematically. The grand coalition suspended this catching-up factor in 2018.

Heil promises: higher minimum wages will come in mid-2022

At the beginning of November it was still said that next July pensions could rise by 5.2 percent in western Germany and by 5.9 percent in the east. This would have increased pensions in western Germany more than they have been for almost 40 years. This year, the corona pandemic had brought about a significant increase in pensioners. In the west there was a zero round, in east Germany an increase of 0.72 percent. The reason was the cyclical slump in premium income. Heil also made it clear: “With a government led by Social Democrats there will be no cuts in pensions. And: The pension development must not be decoupled from the wage development. That is why we ensure a stable pension level over the long term.”

At the same time, he promised to implement the increase in the minimum wage by the middle of next year: “We will tackle the increase in the minimum wage to 12 euros very quickly. The increase should apply by next summer at the latest. Then around ten million people will earn more.”

.
source site-32