Pension: That is all changing now for retirees

There is a lot of good news for retirees in July.

At the end of the day, most should have more money in their pockets by 2022 at the latest - a number of innovations are now making sure of that.

Munich - zero round in the west, small pension increase in the east.

So far, 2021 has not been brimming with good news for retirees.

That will change on July 1st: the basic pension is a done deal, indebted pensioners will have more freedom and even a pension increase in the coming year seems likely.

The most important changes at a glance:

Why was there a pension increase in the east in 2021 but not in the west?

The pensions in the east and west of Germany are to be adjusted by 2024.

Therefore retirees in the east received a small increase of 0.72 percent this year, while retirees in the west received nothing.

The pension level in East and West should thus be equal in the long term.

Will there also be a zero round in 2022?

On the contrary: For the coming year, pensioners in both East and West will probably be able to prepare for rising pensions again.

The CEO of Pension Insurance, Anja Piel, had expressed herself optimistically in this regard: "If wages rise as expected this year, there will probably be a positive pension adjustment again next year," said Piel.

What does the change in the attachment limits mean for me?

July brings good news for indebted pensioners: the seizure limits are increasing by six percent.

Specifically, this means that the seizure exemption limit is now € 1,259.99 instead of € 1,179.99 as was previously the case.

The exemption limit ensures that indebted pensioners have enough to live on, because only retirement benefits over 1,260 euros can be seized.

What is the basic pension?

From July 1, the so-called basic pension, a surcharge on mini pensions, applies.

This increase supports people who have worked long hours but have a low income.

Around 70 percent of these are women and an above-average number of East Germans, according to the federal government.

Increasing the mini-pension can make a big difference: For example, if you have worked for 40 years and earned an average of only 40 percent of the average income, you will now receive EUR 966 instead of the previous EUR 547. 

Who is entitled to the basic pension?

All people who have worked for at least 33 years and have paid into the pension fund during this time are entitled.

Recognized periods of child-rearing and care also count, as do periods of sick pay or short-time work benefits.

Conscription, community service, alternative periods or compulsory vocational training are also included.

When do retirees receive the full supplement on the mini pension?

From 35 years of basic pension period, pensioners receive the full top-up.

Between 33 and 35 years of working time there is a subsidy, but this is lower.

The limit is an average monthly income of 1250 euros for single people and 1950 for spouses.

Whoever is above this receives a lower or no basic pension supplement - depending on the amount of the pension.

When will the money be paid out?

According to the federal government, the payment should be made from summer 2021 - initially for new pensioners, all other beneficiaries have to be patient.

The federal government speaks of a staggered processing until the end of 2022. For existing pensioners, a waiting period of around one year can be expected. 

So do new pensioners get an extra year of money?

No.

Those who are entitled will receive the money retrospectively from January 1, 2021.

With this, the federal government wants to ensure that no one is financially disadvantaged, because the review of 26 million pension payments is being carried out gradually.

Only the time of payment can differ for new and existing pensioners.

How high is the supplement to the mini pension?

The calculation is based on a point system; the contributions differ between East and West Germany.

The federal government assumes that those entitled will receive an average of around 75 euros more, the maximum rate should be around 418 euros. 

Do I have to apply for a basic pension?

No.

No application is necessary, all 26 million pension payments are checked automatically.

There was a mistake in my exam, what can I do?

Anyone who believes they have wrongly not been considered can apply for an examination from January 1, 2023 at the earliest.

If consumers have any questions, they can

contact the German pension insurance company free of charge on

0800/1000 4800

.

How is the basic pension actually financed?

The basic pension is financed with taxpayers' money. According to the federal government, this addition to mini pensions is of great value for society as a whole. "When people feel that their lifetime achievement is recognized because they have worked for decades, raised children and cared for relatives, this also strengthens cohesion in Germany and trust in the statutory pension insurance as the most important pillar of old-age security," the statement said further.